Correlation Between Sahamit Machinery and Turnkey Communication

Can any of the company-specific risk be diversified away by investing in both Sahamit Machinery and Turnkey Communication 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 Sahamit Machinery and Turnkey Communication into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Sahamit Machinery Public and Turnkey Communication Services, you can compare the effects of market volatilities on Sahamit Machinery and Turnkey Communication 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 Sahamit Machinery with a short position of Turnkey Communication. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sahamit Machinery and Turnkey Communication.

Diversification Opportunities for Sahamit Machinery and Turnkey Communication

0.67

Correlation Coefficient

Sahamit Machinery  Turnkey Communication

Poor diversification

The 3 months correlation between Sahamit and Turnkey is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Sahamit Machinery Public and Turnkey Communication Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Turnkey Communication and Sahamit Machinery 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 Sahamit Machinery Public are associated (or correlated) with Turnkey Communication. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Turnkey Communication has no effect on the direction of Sahamit Machinery i.e., Sahamit Machinery and Turnkey Communication go up and down completely randomly.

Pair Corralation between Sahamit Machinery and Turnkey Communication

Assuming the 90 days trading horizon Sahamit Machinery Public is expected to generate 18.12 times more return on investment than Turnkey Communication. However, Sahamit Machinery is 18.12 times more volatile than Turnkey Communication Services. It trades about 0.05 of its potential returns per unit of risk. Turnkey Communication Services is currently generating about -0.05 per unit of risk. If you would invest  436.00  in Sahamit Machinery Public on September 24, 2024 and sell it today you would lose (40.00) from holding Sahamit Machinery Public or give up 9.17% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Sahamit Machinery Public  vs.  Turnkey Communication Services

Sahamit Machinery Public

Risk-Adjusted Performance

0 of 100

Very Weak

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

Turnkey Communication

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Turnkey Communication Services has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's fundamental indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Sahamit Machinery and Turnkey Communication

The main advantage of trading using opposite Sahamit Machinery and Turnkey Communication positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sahamit Machinery position performs unexpectedly, Turnkey Communication 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 Turnkey Communication will offset losses from the drop in Turnkey Communication's long position.

The idea behind Sahamit Machinery Public and Turnkey Communication Services 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.