Correlation Between Sharps Technology and Ansell

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

By analyzing existing cross correlation between Sharps Technology and Ansell Limited, you can compare the effects of market volatilities on Sharps Technology and Ansell 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 Sharps Technology with a short position of Ansell. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sharps Technology and Ansell.

Diversification Opportunities for Sharps Technology and Ansell

-0.81

Correlation Coefficient

Sharps Technology  Ansell

Pay attention - limited upside

The 3 months correlation between Sharps and Ansell is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Sharps Technology and Ansell Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ansell Limited and Sharps Technology 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 Sharps Technology are associated (or correlated) with Ansell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ansell Limited has no effect on the direction of Sharps Technology i.e., Sharps Technology and Ansell go up and down completely randomly.

Pair Corralation between Sharps Technology and Ansell

Given the investment horizon of 90 days Sharps Technology is expected to under-perform the Ansell. In addition to that, Sharps Technology is 4.83 times more volatile than Ansell Limited. It trades about -0.13 of its total potential returns per unit of risk. Ansell Limited is currently generating about 0.12 per unit of volatility. If you would invest  1,844  in Ansell Limited on September 14, 2024 and sell it today you would earn a total of  236.00  from holding Ansell Limited or generate 12.8% return on investment over 90 days.

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

Sharps Technology  vs.  Ansell Limited

Sharps Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sharps Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Ansell Limited

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ansell Limited are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly conflicting essential indicators, Ansell reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sharps Technology and Ansell

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

The idea behind Sharps Technology and Ansell Limited 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.