Correlation Between SG Blocks and TechPrecision Common
Can any of the company-specific risk be diversified away by investing in both SG Blocks and TechPrecision Common 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 SG Blocks and TechPrecision Common into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SG Blocks and TechPrecision Common, you can compare the effects of market volatilities on SG Blocks and TechPrecision Common 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 SG Blocks with a short position of TechPrecision Common. Check out your portfolio center. Please also check ongoing floating volatility patterns of SG Blocks and TechPrecision Common.
Diversification Opportunities for SG Blocks and TechPrecision Common
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SGBX and TechPrecision is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding SG Blocks and TechPrecision Common in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TechPrecision Common and SG Blocks 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 SG Blocks are associated (or correlated) with TechPrecision Common. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TechPrecision Common has no effect on the direction of SG Blocks i.e., SG Blocks and TechPrecision Common go up and down completely randomly.
Pair Corralation between SG Blocks and TechPrecision Common
Given the investment horizon of 90 days SG Blocks is expected to under-perform the TechPrecision Common. In addition to that, SG Blocks is 2.27 times more volatile than TechPrecision Common. It trades about -0.04 of its total potential returns per unit of risk. TechPrecision Common is currently generating about -0.02 per unit of volatility. If you would invest 864.00 in TechPrecision Common on August 31, 2024 and sell it today you would lose (499.00) from holding TechPrecision Common or give up 57.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SG Blocks vs. TechPrecision Common
Performance |
| Timeline |
| SG Blocks |
| TechPrecision Common |
SG Blocks and TechPrecision Common Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SG Blocks and TechPrecision Common
The main advantage of trading using opposite SG Blocks and TechPrecision Common positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SG Blocks position performs unexpectedly, TechPrecision Common 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 TechPrecision Common will offset losses from the drop in TechPrecision Common's long position.| SG Blocks vs. Insteel Industries | SG Blocks vs. Carpenter Technology | SG Blocks vs. Mueller Industries | SG Blocks vs. Northwest Pipe |
| TechPrecision Common vs. Deswell Industries | TechPrecision Common vs. Euro Tech Holdings | TechPrecision Common vs. China Natural Resources | TechPrecision Common vs. Arts Way Manufacturing 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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