Correlation Between SSI and Converge Information

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

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

Diversification Opportunities for SSI and Converge Information

0.0

Correlation Coefficient

SSI  Converge Information

Pay attention - limited upside

The 3 months correlation between SSI and Converge is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SSI Group and Converge Information Communica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Converge Information and SSI 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 SSI Group are associated (or correlated) with Converge Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Converge Information has no effect on the direction of SSI i.e., SSI and Converge Information go up and down completely randomly.

Pair Corralation between SSI and Converge Information

If you would invest  0.00  in SSI Group on October 11, 2024 and sell it today you would earn a total of  0.00  from holding SSI Group or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.21%
Values	Daily Returns

SSI Group  vs.  Converge Information Communica

SSI Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SSI Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, SSI is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Converge Information

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Converge Information Communications has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Converge Information is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with SSI and Converge Information

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

The idea behind SSI Group and Converge Information Communications 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.