Correlation Between Syrma SGS and Data Patterns

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

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

Diversification Opportunities for Syrma SGS and Data Patterns

0.9

Correlation Coefficient

Syrma SGS  Data Patterns

Almost no diversification

The 3 months correlation between Syrma and Data is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Syrma SGS Technology and Data Patterns Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Data Patterns Limited and Syrma SGS 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 Syrma SGS Technology are associated (or correlated) with Data Patterns. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Data Patterns Limited has no effect on the direction of Syrma SGS i.e., Syrma SGS and Data Patterns go up and down completely randomly.

Pair Corralation between Syrma SGS and Data Patterns

Assuming the 90 days trading horizon Syrma SGS Technology is expected to generate 1.1 times more return on investment than Data Patterns. However, Syrma SGS is 1.1 times more volatile than Data Patterns Limited. It trades about -0.06 of its potential returns per unit of risk. Data Patterns Limited is currently generating about -0.14 per unit of risk. If you would invest  58,955  in Syrma SGS Technology on December 26, 2024 and sell it today you would lose (11,965) from holding Syrma SGS Technology or give up 20.3% of portfolio value over 90 days.

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

Syrma SGS Technology  vs.  Data Patterns Limited

Syrma SGS Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days Syrma SGS Technology 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 Stock's basic 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 firm investors.

Data Patterns Limited

Risk-Adjusted Performance

Very Weak

Over the last 90 days Data Patterns Limited 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 Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Syrma SGS and Data Patterns

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

The idea behind Syrma SGS Technology and Data Patterns 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.