Correlation Between SSC Technologies and Model N
Can any of the company-specific risk be diversified away by investing in both SSC Technologies and Model N 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 SSC Technologies and Model N into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SSC Technologies Holdings and Model N, you can compare the effects of market volatilities on SSC Technologies and Model N 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 SSC Technologies with a short position of Model N. Check out your portfolio center. Please also check ongoing floating volatility patterns of SSC Technologies and Model N.
Diversification Opportunities for SSC Technologies and Model N
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between SSC and Model is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding SSC Technologies Holdings and Model N in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Model N and SSC 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 SSC Technologies Holdings are associated (or correlated) with Model N. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Model N has no effect on the direction of SSC Technologies i.e., SSC Technologies and Model N go up and down completely randomly.
Pair Corralation between SSC Technologies and Model N
Given the investment horizon of 90 days SSC Technologies Holdings is expected to generate 0.7 times more return on investment than Model N. However, SSC Technologies Holdings is 1.43 times less risky than Model N. It trades about 0.1 of its potential returns per unit of risk. Model N is currently generating about 0.03 per unit of risk. If you would invest 6,008 in SSC Technologies Holdings on October 20, 2024 and sell it today you would earn a total of 1,842 from holding SSC Technologies Holdings or generate 30.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 43.55% |
| Values | Daily Returns |
SSC Technologies Holdings vs. Model N
Performance |
| Timeline |
| SSC Technologies Holdings |
| Model N |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
SSC Technologies and Model N Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SSC Technologies and Model N
The main advantage of trading using opposite SSC Technologies and Model N positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SSC Technologies position performs unexpectedly, Model N 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 Model N will offset losses from the drop in Model N's long position.| SSC Technologies vs. Aspen Technology | SSC Technologies vs. Bentley Systems | SSC Technologies vs. Tyler Technologies | SSC Technologies vs. Blackbaud |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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