Correlation Between Sky ICT and Com7 PCL

Can any of the company-specific risk be diversified away by investing in both Sky ICT and Com7 PCL at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Sky ICT and Com7 PCL into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Sky ICT Public and Com7 PCL, you can compare the effects of market volatilities on Sky ICT and Com7 PCL and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Sky ICT with a short position of Com7 PCL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sky ICT and Com7 PCL.

Diversification Opportunities for Sky ICT and Com7 PCL

-0.14

Correlation Coefficient

Sky ICT  Com7 PCL

Good diversification

The 3 months correlation between Sky and Com7 is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Sky ICT Public and Com7 PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Com7 PCL and Sky ICT is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Sky ICT Public are associated (or correlated) with Com7 PCL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Com7 PCL has no effect on the direction of Sky ICT i.e., Sky ICT and Com7 PCL go up and down completely randomly.

Pair Corralation between Sky ICT and Com7 PCL

Assuming the 90 days trading horizon Sky ICT Public is expected to generate 1.25 times more return on investment than Com7 PCL. However, Sky ICT is 1.25 times more volatile than Com7 PCL. It trades about 0.23 of its potential returns per unit of risk. Com7 PCL is currently generating about -0.18 per unit of risk. If you would invest  2,340  in Sky ICT Public on October 10, 2024 and sell it today you would earn a total of  235.00  from holding Sky ICT Public or generate 10.04% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.0%
Values	Daily Returns

Sky ICT Public  vs.  Com7 PCL

Sky ICT Public

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sky ICT Public are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, Sky ICT disclosed solid returns over the last few months and may actually be approaching a breakup point.

Com7 PCL

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Com7 PCL has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Com7 PCL is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Sky ICT and Com7 PCL

The main advantage of trading using opposite Sky ICT and Com7 PCL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sky ICT position performs unexpectedly, Com7 PCL can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Com7 PCL will offset losses from the drop in Com7 PCL's long position.

The idea behind Sky ICT Public and Com7 PCL pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.