Correlation Between Algorand and SGA Solutions
Can any of the company-specific risk be diversified away by investing in both Algorand and SGA Solutions 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 Algorand and SGA Solutions into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Algorand and SGA Solutions CoLtd, you can compare the effects of market volatilities on Algorand and SGA Solutions 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 Algorand with a short position of SGA Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Algorand and SGA Solutions.
Diversification Opportunities for Algorand and SGA Solutions
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Algorand and SGA is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Algorand and SGA Solutions CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SGA Solutions CoLtd and Algorand 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 Algorand are associated (or correlated) with SGA Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SGA Solutions CoLtd has no effect on the direction of Algorand i.e., Algorand and SGA Solutions go up and down completely randomly.
Pair Corralation between Algorand and SGA Solutions
Assuming the 90 days trading horizon Algorand is expected to generate 3.7 times more return on investment than SGA Solutions. However, Algorand is 3.7 times more volatile than SGA Solutions CoLtd. It trades about 0.18 of its potential returns per unit of risk. SGA Solutions CoLtd is currently generating about 0.03 per unit of risk. If you would invest 22.00 in Algorand on October 17, 2024 and sell it today you would earn a total of 17.00 from holding Algorand or generate 77.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.12% |
| Values | Daily Returns |
Algorand vs. SGA Solutions CoLtd
Performance |
| Timeline |
| Algorand |
| SGA Solutions CoLtd |
Algorand and SGA Solutions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Algorand and SGA Solutions
The main advantage of trading using opposite Algorand and SGA Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Algorand position performs unexpectedly, SGA Solutions 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 SGA Solutions will offset losses from the drop in SGA Solutions' long position.The idea behind Algorand and SGA Solutions CoLtd 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.| SGA Solutions vs. KMH Hitech Co | SGA Solutions vs. GemVaxKAEL CoLtd | SGA Solutions vs. Bosung Power Technology | SGA Solutions vs. Busan Industrial Co |
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 Stocks Directory module to find actively traded stocks across global markets.
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