Correlation Between Sure Tech and Polyram Plastic

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

Diversification Opportunities for Sure Tech and Polyram Plastic

-0.12

Correlation Coefficient

Sure Tech  Polyram Plastic

Good diversification

The 3 months correlation between Sure and Polyram is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Sure Tech Investments LP and Polyram Plastic Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polyram Plastic Indu 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 Polyram Plastic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Polyram Plastic Indu has no effect on the direction of Sure Tech i.e., Sure Tech and Polyram Plastic go up and down completely randomly.

Pair Corralation between Sure Tech and Polyram Plastic

Assuming the 90 days trading horizon Sure Tech is expected to generate 2.76 times less return on investment than Polyram Plastic. In addition to that, Sure Tech is 1.34 times more volatile than Polyram Plastic Industries. It trades about 0.04 of its total potential returns per unit of risk. Polyram Plastic Industries is currently generating about 0.13 per unit of volatility. If you would invest  111,904  in Polyram Plastic Industries on September 13, 2024 and sell it today you would earn a total of  12,996  from holding Polyram Plastic Industries or generate 11.61% 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.  Polyram Plastic Industries

Sure Tech Investments

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Sure Tech Investments LP are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. 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.

Polyram Plastic Indu

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Polyram Plastic Industries are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Polyram Plastic sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sure Tech and Polyram Plastic

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

The idea behind Sure Tech Investments LP and Polyram Plastic Industries 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.