Correlation Between Gunkul Engineering and SVI Public

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

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

Diversification Opportunities for Gunkul Engineering and SVI Public

0.27

Correlation Coefficient

Gunkul Engineering  SVI Public

Modest diversification

The 3 months correlation between Gunkul and SVI is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Gunkul Engineering Public and SVI Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SVI Public and Gunkul Engineering 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 Gunkul Engineering Public are associated (or correlated) with SVI Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SVI Public has no effect on the direction of Gunkul Engineering i.e., Gunkul Engineering and SVI Public go up and down completely randomly.

Pair Corralation between Gunkul Engineering and SVI Public

Assuming the 90 days trading horizon Gunkul Engineering Public is expected to under-perform the SVI Public. But the stock apears to be less risky and, when comparing its historical volatility, Gunkul Engineering Public is 2.12 times less risky than SVI Public. The stock trades about -0.31 of its potential returns per unit of risk. The SVI Public is currently generating about -0.13 of returns per unit of risk over similar time horizon. If you would invest  860.00  in SVI Public on September 12, 2024 and sell it today you would lose (110.00) from holding SVI Public or give up 12.79% of portfolio value over 90 days.

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

Gunkul Engineering Public  vs.  SVI Public

Gunkul Engineering Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gunkul Engineering Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting 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.

SVI Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SVI Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward indicators, SVI Public is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Gunkul Engineering and SVI Public

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

The idea behind Gunkul Engineering Public and SVI Public 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.