Correlation Between Azure Holding and Southern ITS

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

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

Diversification Opportunities for Azure Holding and Southern ITS

0.09

Correlation Coefficient

Azure Holding  Southern ITS

Significant diversification

The 3 months correlation between Azure and Southern is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Azure Holding Group and Southern ITS International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southern ITS Interna and Azure Holding 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 Azure Holding Group are associated (or correlated) with Southern ITS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southern ITS Interna has no effect on the direction of Azure Holding i.e., Azure Holding and Southern ITS go up and down completely randomly.

Pair Corralation between Azure Holding and Southern ITS

Given the investment horizon of 90 days Azure Holding Group is expected to generate 5.23 times more return on investment than Southern ITS. However, Azure Holding is 5.23 times more volatile than Southern ITS International. It trades about 0.21 of its potential returns per unit of risk. Southern ITS International is currently generating about 0.01 per unit of risk. If you would invest  2.95  in Azure Holding Group on September 15, 2024 and sell it today you would earn a total of  9.05  from holding Azure Holding Group or generate 306.78% return on investment over 90 days.

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

Azure Holding Group  vs.  Southern ITS International

Azure Holding Group

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Azure Holding Group are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating basic indicators, Azure Holding demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Southern ITS Interna

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Southern ITS International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Southern ITS is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Azure Holding and Southern ITS

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

The idea behind Azure Holding Group and Southern ITS International 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.