Correlation Between Solowin Holdings and Alchemy Investments

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

By analyzing existing cross correlation between Solowin Holdings Ordinary and Alchemy Investments Acquisition, you can compare the effects of market volatilities on Solowin Holdings and Alchemy Investments 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 Solowin Holdings with a short position of Alchemy Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Solowin Holdings and Alchemy Investments.

Diversification Opportunities for Solowin Holdings and Alchemy Investments

-0.54

Correlation Coefficient

Solowin Holdings  Alchemy Investments

Excellent diversification

The 3 months correlation between Solowin and Alchemy is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Solowin Holdings Ordinary and Alchemy Investments Acquisitio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alchemy Investments and Solowin Holdings 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 Solowin Holdings Ordinary are associated (or correlated) with Alchemy Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alchemy Investments has no effect on the direction of Solowin Holdings i.e., Solowin Holdings and Alchemy Investments go up and down completely randomly.

Pair Corralation between Solowin Holdings and Alchemy Investments

Given the investment horizon of 90 days Solowin Holdings Ordinary is expected to under-perform the Alchemy Investments. In addition to that, Solowin Holdings is 12.91 times more volatile than Alchemy Investments Acquisition. It trades about -0.1 of its total potential returns per unit of risk. Alchemy Investments Acquisition is currently generating about 0.12 per unit of volatility. If you would invest  1,101  in Alchemy Investments Acquisition on December 1, 2024 and sell it today you would earn a total of  47.00  from holding Alchemy Investments Acquisition or generate 4.27% return on investment over 90 days.

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

Solowin Holdings Ordinary  vs.  Alchemy Investments Acquisitio

Solowin Holdings Ordinary

Risk-Adjusted Performance

Very Weak

Over the last 90 days Solowin Holdings Ordinary has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Etf's forward indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the ETF investors.

Alchemy Investments

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Alchemy Investments Acquisition are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Alchemy Investments is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Solowin Holdings and Alchemy Investments

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

The idea behind Solowin Holdings Ordinary and Alchemy Investments Acquisition 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.