Correlation Between SBI Holdings and ARITZIA INCSUBVTGSHS

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

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

Diversification Opportunities for SBI Holdings and ARITZIA INCSUBVTGSHS

0.53

Correlation Coefficient

SBI Holdings  ARITZIA INCSUBVTGSHS

Very weak diversification

The 3 months correlation between SBI and ARITZIA is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding SBI Holdings and ARITZIA INCSUBVTGSHS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ARITZIA INCSUBVTGSHS and SBI 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 SBI Holdings are associated (or correlated) with ARITZIA INCSUBVTGSHS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ARITZIA INCSUBVTGSHS has no effect on the direction of SBI Holdings i.e., SBI Holdings and ARITZIA INCSUBVTGSHS go up and down completely randomly.

Pair Corralation between SBI Holdings and ARITZIA INCSUBVTGSHS

Assuming the 90 days trading horizon SBI Holdings is expected to generate 0.57 times more return on investment than ARITZIA INCSUBVTGSHS. However, SBI Holdings is 1.76 times less risky than ARITZIA INCSUBVTGSHS. It trades about 0.09 of its potential returns per unit of risk. ARITZIA INCSUBVTGSHS is currently generating about -0.01 per unit of risk. If you would invest  2,380  in SBI Holdings on December 21, 2024 and sell it today you would earn a total of  240.00  from holding SBI Holdings or generate 10.08% return on investment over 90 days.

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

SBI Holdings  vs.  ARITZIA INCSUBVTGSHS

SBI Holdings

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in SBI Holdings are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, SBI Holdings may actually be approaching a critical reversion point that can send shares even higher in April 2025.

ARITZIA INCSUBVTGSHS

Risk-Adjusted Performance

Very Weak

Over the last 90 days ARITZIA INCSUBVTGSHS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, ARITZIA INCSUBVTGSHS is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with SBI Holdings and ARITZIA INCSUBVTGSHS

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

The idea behind SBI Holdings and ARITZIA INCSUBVTGSHS 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.