Correlation Between Sure Tech and Nrgene Technologies

Can any of the company-specific risk be diversified away by investing in both Sure Tech and Nrgene Technologies 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 Nrgene Technologies 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 Nrgene Technologies, you can compare the effects of market volatilities on Sure Tech and Nrgene Technologies 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 Nrgene Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sure Tech and Nrgene Technologies.

Diversification Opportunities for Sure Tech and Nrgene Technologies

-0.23

Correlation Coefficient

Sure Tech  Nrgene Technologies

Very good diversification

The 3 months correlation between Sure and Nrgene is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Sure Tech Investments LP and Nrgene Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nrgene Technologies 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 Nrgene Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nrgene Technologies has no effect on the direction of Sure Tech i.e., Sure Tech and Nrgene Technologies go up and down completely randomly.

Pair Corralation between Sure Tech and Nrgene Technologies

Assuming the 90 days trading horizon Sure Tech Investments LP is expected to under-perform the Nrgene Technologies. But the stock apears to be less risky and, when comparing its historical volatility, Sure Tech Investments LP is 1.71 times less risky than Nrgene Technologies. The stock trades about -0.04 of its potential returns per unit of risk. The Nrgene Technologies is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  24,880  in Nrgene Technologies on December 30, 2024 and sell it today you would earn a total of  4,120  from holding Nrgene Technologies or generate 16.56% return on investment over 90 days.

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

Sure Tech Investments LP  vs.  Nrgene Technologies

Sure Tech Investments

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sure Tech Investments LP has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Sure Tech is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Nrgene Technologies

Risk-Adjusted Performance

OK

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

Pair Trading with Sure Tech and Nrgene Technologies

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

The idea behind Sure Tech Investments LP and Nrgene Technologies 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.