Correlation Between Samji Electronics and Finetechnix CoLtd

Can any of the company-specific risk be diversified away by investing in both Samji Electronics and Finetechnix CoLtd 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 Samji Electronics and Finetechnix CoLtd into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Samji Electronics Co and Finetechnix CoLtd, you can compare the effects of market volatilities on Samji Electronics and Finetechnix CoLtd 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 Samji Electronics with a short position of Finetechnix CoLtd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samji Electronics and Finetechnix CoLtd.

Diversification Opportunities for Samji Electronics and Finetechnix CoLtd

0.5

Correlation Coefficient

Samji Electronics  Finetechnix CoLtd

Very weak diversification

The 3 months correlation between Samji and Finetechnix is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Samji Electronics Co and Finetechnix CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Finetechnix CoLtd and Samji Electronics 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 Samji Electronics Co are associated (or correlated) with Finetechnix CoLtd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Finetechnix CoLtd has no effect on the direction of Samji Electronics i.e., Samji Electronics and Finetechnix CoLtd go up and down completely randomly.

Pair Corralation between Samji Electronics and Finetechnix CoLtd

Assuming the 90 days trading horizon Samji Electronics Co is expected to generate 0.53 times more return on investment than Finetechnix CoLtd. However, Samji Electronics Co is 1.9 times less risky than Finetechnix CoLtd. It trades about 0.01 of its potential returns per unit of risk. Finetechnix CoLtd is currently generating about -0.06 per unit of risk. If you would invest  795,658  in Samji Electronics Co on September 3, 2024 and sell it today you would earn a total of  42,342  from holding Samji Electronics Co or generate 5.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Samji Electronics Co  vs.  Finetechnix CoLtd

Samji Electronics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Samji Electronics Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Finetechnix CoLtd

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Finetechnix CoLtd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Samji Electronics and Finetechnix CoLtd

The main advantage of trading using opposite Samji Electronics and Finetechnix CoLtd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samji Electronics position performs unexpectedly, Finetechnix CoLtd 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 Finetechnix CoLtd will offset losses from the drop in Finetechnix CoLtd's long position.

The idea behind Samji Electronics Co and Finetechnix CoLtd 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.

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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.