Correlation Between Sakar Healthcare and HCL Technologies

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

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

Diversification Opportunities for Sakar Healthcare and HCL Technologies

-0.55

Correlation Coefficient

Sakar Healthcare  HCL Technologies

Excellent diversification

The 3 months correlation between Sakar and HCL is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Sakar Healthcare Limited and HCL Technologies Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HCL Technologies and Sakar Healthcare 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 Sakar Healthcare Limited are associated (or correlated) with HCL Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HCL Technologies has no effect on the direction of Sakar Healthcare i.e., Sakar Healthcare and HCL Technologies go up and down completely randomly.

Pair Corralation between Sakar Healthcare and HCL Technologies

Assuming the 90 days trading horizon Sakar Healthcare is expected to generate 9.38 times less return on investment than HCL Technologies. In addition to that, Sakar Healthcare is 1.5 times more volatile than HCL Technologies Limited. It trades about 0.01 of its total potential returns per unit of risk. HCL Technologies Limited is currently generating about 0.08 per unit of volatility. If you would invest  177,890  in HCL Technologies Limited on September 5, 2024 and sell it today you would earn a total of  11,185  from holding HCL Technologies Limited or generate 6.29% return on investment over 90 days.

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

Sakar Healthcare Limited  vs.  HCL Technologies Limited

Sakar Healthcare

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sakar Healthcare Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy forward-looking signals, Sakar Healthcare is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

HCL Technologies

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in HCL Technologies Limited are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak technical and fundamental indicators, HCL Technologies may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Sakar Healthcare and HCL Technologies

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

The idea behind Sakar Healthcare Limited and HCL Technologies Limited 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.