Correlation Between SSC Technologies and ADEIA P

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

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

Diversification Opportunities for SSC Technologies and ADEIA P

0.47

Correlation Coefficient

SSC Technologies  ADEIA P

Very weak diversification

The 3 months correlation between SSC and ADEIA is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding SSC Technologies Holdings and ADEIA P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ADEIA P and SSC Technologies 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 SSC Technologies Holdings are associated (or correlated) with ADEIA P. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ADEIA P has no effect on the direction of SSC Technologies i.e., SSC Technologies and ADEIA P go up and down completely randomly.

Pair Corralation between SSC Technologies and ADEIA P

Given the investment horizon of 90 days SSC Technologies is expected to generate 2.23 times less return on investment than ADEIA P. But when comparing it to its historical volatility, SSC Technologies Holdings is 2.88 times less risky than ADEIA P. It trades about 0.19 of its potential returns per unit of risk. ADEIA P is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  1,212  in ADEIA P on November 29, 2024 and sell it today you would earn a total of  391.00  from holding ADEIA P or generate 32.26% return on investment over 90 days.

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

SSC Technologies Holdings  vs.  ADEIA P

SSC Technologies Holdings

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SSC Technologies Holdings are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating basic indicators, SSC Technologies exhibited solid returns over the last few months and may actually be approaching a breakup point.

ADEIA P

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ADEIA P are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating technical and fundamental indicators, ADEIA P sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SSC Technologies and ADEIA P

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

The idea behind SSC Technologies Holdings and ADEIA P 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.