Correlation Between Sify Technologies and Lumen Technologies
Can any of the company-specific risk be diversified away by investing in both Sify Technologies and Lumen Technologies 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 Sify Technologies and Lumen Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sify Technologies Limited and Lumen Technologies, you can compare the effects of market volatilities on Sify Technologies and Lumen Technologies 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 Sify Technologies with a short position of Lumen Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sify Technologies and Lumen Technologies.
Diversification Opportunities for Sify Technologies and Lumen Technologies
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Sify and Lumen is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Sify Technologies Limited and Lumen Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lumen Technologies and Sify Technologies 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 Sify Technologies Limited are associated (or correlated) with Lumen Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lumen Technologies has no effect on the direction of Sify Technologies i.e., Sify Technologies and Lumen Technologies go up and down completely randomly.
Pair Corralation between Sify Technologies and Lumen Technologies
Given the investment horizon of 90 days Sify Technologies Limited is expected to under-perform the Lumen Technologies. But the stock apears to be less risky and, when comparing its historical volatility, Sify Technologies Limited is 1.1 times less risky than Lumen Technologies. The stock trades about 0.0 of its potential returns per unit of risk. The Lumen Technologies is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 641.00 in Lumen Technologies on August 27, 2024 and sell it today you would earn a total of 147.00 from holding Lumen Technologies or generate 22.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sify Technologies Limited vs. Lumen Technologies
Performance |
| Timeline |
| Sify Technologies |
| Lumen Technologies |
Sify Technologies and Lumen Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sify Technologies and Lumen Technologies
The main advantage of trading using opposite Sify Technologies and Lumen Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sify Technologies position performs unexpectedly, Lumen Technologies 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 Lumen Technologies will offset losses from the drop in Lumen Technologies' long position.| Sify Technologies vs. KORE Group Holdings | Sify Technologies vs. Consolidated Communications | Sify Technologies vs. Cogent Communications Group | Sify Technologies vs. Liberty Broadband Srs |
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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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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