Correlation Between SSH Communications and Fodelia

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

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

Diversification Opportunities for SSH Communications and Fodelia

-0.28

Correlation Coefficient

SSH Communications  Fodelia

Very good diversification

The 3 months correlation between SSH and Fodelia is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding SSH Communications Security and Fodelia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fodelia and SSH Communications 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 SSH Communications Security are associated (or correlated) with Fodelia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fodelia has no effect on the direction of SSH Communications i.e., SSH Communications and Fodelia go up and down completely randomly.

Pair Corralation between SSH Communications and Fodelia

Assuming the 90 days trading horizon SSH Communications Security is expected to generate 2.07 times more return on investment than Fodelia. However, SSH Communications is 2.07 times more volatile than Fodelia. It trades about -0.06 of its potential returns per unit of risk. Fodelia is currently generating about -0.13 per unit of risk. If you would invest  114.00  in SSH Communications Security on October 8, 2024 and sell it today you would lose (5.00) from holding SSH Communications Security or give up 4.39% of portfolio value over 90 days.

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

SSH Communications Security  vs.  Fodelia

SSH Communications

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SSH Communications Security has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's technical indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Fodelia

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Fodelia are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak technical and fundamental indicators, Fodelia may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with SSH Communications and Fodelia

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

The idea behind SSH Communications Security and Fodelia 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.

Check out your portfolio center.

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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.