Correlation Between Stingray and TECSYS
Can any of the company-specific risk be diversified away by investing in both Stingray and TECSYS 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 Stingray and TECSYS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stingray Group and TECSYS Inc, you can compare the effects of market volatilities on Stingray and TECSYS 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 Stingray with a short position of TECSYS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stingray and TECSYS.
Diversification Opportunities for Stingray and TECSYS
Good diversification
The 3 months correlation between Stingray and TECSYS is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Stingray Group and TECSYS Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TECSYS Inc and Stingray 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 Stingray Group are associated (or correlated) with TECSYS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TECSYS Inc has no effect on the direction of Stingray i.e., Stingray and TECSYS go up and down completely randomly.
Pair Corralation between Stingray and TECSYS
Assuming the 90 days trading horizon Stingray is expected to generate 1.12 times less return on investment than TECSYS. But when comparing it to its historical volatility, Stingray Group is 1.17 times less risky than TECSYS. It trades about 0.06 of its potential returns per unit of risk. TECSYS Inc is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2,675 in TECSYS Inc on November 10, 2024 and sell it today you would earn a total of 1,775 from holding TECSYS Inc or generate 66.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stingray Group vs. TECSYS Inc
Performance |
| Timeline |
| Stingray Group |
| TECSYS Inc |
Stingray and TECSYS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stingray and TECSYS
The main advantage of trading using opposite Stingray and TECSYS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stingray position performs unexpectedly, TECSYS 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 TECSYS will offset losses from the drop in TECSYS's long position.The idea behind Stingray Group and TECSYS Inc 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.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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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