Correlation Between Sure Tech and Internet Gold

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

By analyzing existing cross correlation between Sure Tech Investments LP and Internet Gold Golden, you can compare the effects of market volatilities on Sure Tech and Internet Gold 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 Sure Tech with a short position of Internet Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sure Tech and Internet Gold.

Diversification Opportunities for Sure Tech and Internet Gold

-0.19

Correlation Coefficient

Sure Tech  Internet Gold

Good diversification

The 3 months correlation between Sure and Internet is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Sure Tech Investments LP and Internet Gold Golden in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Internet Gold Golden and Sure Tech 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 Sure Tech Investments LP are associated (or correlated) with Internet Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Internet Gold Golden has no effect on the direction of Sure Tech i.e., Sure Tech and Internet Gold go up and down completely randomly.

Pair Corralation between Sure Tech and Internet Gold

Assuming the 90 days trading horizon Sure Tech is expected to generate 2.79 times less return on investment than Internet Gold. But when comparing it to its historical volatility, Sure Tech Investments LP is 5.61 times less risky than Internet Gold. It trades about 0.11 of its potential returns per unit of risk. Internet Gold Golden is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  48,000  in Internet Gold Golden on October 26, 2024 and sell it today you would lose (310.00) from holding Internet Gold Golden or give up 0.65% of portfolio value over 90 days.

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

Sure Tech Investments LP  vs.  Internet Gold Golden

Sure Tech Investments

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sure Tech Investments LP are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Sure Tech sustained solid returns over the last few months and may actually be approaching a breakup point.

Internet Gold Golden

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Internet Gold Golden are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Internet Gold sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sure Tech and Internet Gold

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

The idea behind Sure Tech Investments LP and Internet Gold Golden 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..