Correlation Between Sidetrade and Streamwide

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

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

Diversification Opportunities for Sidetrade and Streamwide

-0.03

Correlation Coefficient

Sidetrade  Streamwide

Good diversification

The 3 months correlation between Sidetrade and Streamwide is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Sidetrade and Streamwide in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Streamwide and Sidetrade 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 Sidetrade are associated (or correlated) with Streamwide. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Streamwide has no effect on the direction of Sidetrade i.e., Sidetrade and Streamwide go up and down completely randomly.

Pair Corralation between Sidetrade and Streamwide

Assuming the 90 days trading horizon Sidetrade is expected to generate 15.66 times less return on investment than Streamwide. But when comparing it to its historical volatility, Sidetrade is 1.85 times less risky than Streamwide. It trades about 0.02 of its potential returns per unit of risk. Streamwide is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  2,750  in Streamwide on September 1, 2024 and sell it today you would earn a total of  290.00  from holding Streamwide or generate 10.55% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.65%
Values	Daily Returns

Sidetrade  vs.  Streamwide

Sidetrade

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Sidetrade are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Sidetrade may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Streamwide

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Streamwide are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Streamwide is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Sidetrade and Streamwide

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

The idea behind Sidetrade and Streamwide 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.