Correlation Between Sonata Software and GACM Technologies
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By analyzing existing cross correlation between Sonata Software Limited and GACM Technologies Limited, you can compare the effects of market volatilities on Sonata Software and GACM 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 Sonata Software with a short position of GACM Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sonata Software and GACM Technologies.
Diversification Opportunities for Sonata Software and GACM Technologies
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sonata and GACM is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Sonata Software Limited and GACM Technologies Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GACM Technologies and Sonata Software 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 Sonata Software Limited are associated (or correlated) with GACM Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GACM Technologies has no effect on the direction of Sonata Software i.e., Sonata Software and GACM Technologies go up and down completely randomly.
Pair Corralation between Sonata Software and GACM Technologies
Assuming the 90 days trading horizon Sonata Software Limited is expected to generate 2.18 times more return on investment than GACM Technologies. However, Sonata Software is 2.18 times more volatile than GACM Technologies Limited. It trades about 0.06 of its potential returns per unit of risk. GACM Technologies Limited is currently generating about -0.2 per unit of risk. If you would invest 25,896 in Sonata Software Limited on September 13, 2024 and sell it today you would earn a total of 42,419 from holding Sonata Software Limited or generate 163.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 72.13% |
| Values | Daily Returns |
Sonata Software Limited vs. GACM Technologies Limited
Performance |
| Timeline |
| Sonata Software |
| GACM Technologies |
Sonata Software and GACM Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sonata Software and GACM Technologies
The main advantage of trading using opposite Sonata Software and GACM Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sonata Software position performs unexpectedly, GACM 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 GACM Technologies will offset losses from the drop in GACM Technologies' long position.| Sonata Software vs. Vodafone Idea Limited | Sonata Software vs. Yes Bank Limited | Sonata Software vs. Indian Overseas Bank | Sonata Software vs. Indian Oil |
| GACM Technologies vs. Arrow Greentech Limited | GACM Technologies vs. Sonata Software Limited | GACM Technologies vs. Orient Technologies Limited | GACM Technologies vs. VA Tech Wabag |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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