Correlation Between SR Accord and Telsys

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

By analyzing existing cross correlation between SR Accord and Telsys, you can compare the effects of market volatilities on SR Accord and Telsys 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 SR Accord with a short position of Telsys. Check out your portfolio center. Please also check ongoing floating volatility patterns of SR Accord and Telsys.

Diversification Opportunities for SR Accord and Telsys

0.45

Correlation Coefficient

SR Accord  Telsys

Very weak diversification

The 3 months correlation between SRAC and Telsys is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding SR Accord and Telsys in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telsys and SR Accord 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 SR Accord are associated (or correlated) with Telsys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Telsys has no effect on the direction of SR Accord i.e., SR Accord and Telsys go up and down completely randomly.

Pair Corralation between SR Accord and Telsys

Assuming the 90 days trading horizon SR Accord is expected to generate 0.66 times more return on investment than Telsys. However, SR Accord is 1.52 times less risky than Telsys. It trades about 0.35 of its potential returns per unit of risk. Telsys is currently generating about 0.07 per unit of risk. If you would invest  282,435  in SR Accord on September 15, 2024 and sell it today you would earn a total of  138,665  from holding SR Accord or generate 49.1% return on investment over 90 days.

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

SR Accord  vs.  Telsys

SR Accord

Risk-Adjusted Performance

27 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in SR Accord are ranked lower than 27 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, SR Accord sustained solid returns over the last few months and may actually be approaching a breakup point.

Telsys

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Telsys are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Telsys sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SR Accord and Telsys

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

The idea behind SR Accord and Telsys 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 Commodity Directory module to find actively traded commodities issued by global exchanges.