Correlation Between Sasken Technologies and Navin Fluorine

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

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

Diversification Opportunities for Sasken Technologies and Navin Fluorine

0.51

Correlation Coefficient

Sasken Technologies  Navin Fluorine

Very weak diversification

The 3 months correlation between Sasken and Navin is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Sasken Technologies Limited and Navin Fluorine International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Navin Fluorine Inter and Sasken Technologies 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 Sasken Technologies Limited are associated (or correlated) with Navin Fluorine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Navin Fluorine Inter has no effect on the direction of Sasken Technologies i.e., Sasken Technologies and Navin Fluorine go up and down completely randomly.

Pair Corralation between Sasken Technologies and Navin Fluorine

Assuming the 90 days trading horizon Sasken Technologies Limited is expected to generate 1.43 times more return on investment than Navin Fluorine. However, Sasken Technologies is 1.43 times more volatile than Navin Fluorine International. It trades about 0.08 of its potential returns per unit of risk. Navin Fluorine International is currently generating about -0.01 per unit of risk. If you would invest  86,243  in Sasken Technologies Limited on September 18, 2024 and sell it today you would earn a total of  121,767  from holding Sasken Technologies Limited or generate 141.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.79%
Values	Daily Returns

Sasken Technologies Limited  vs.  Navin Fluorine International

Sasken Technologies

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sasken Technologies Limited are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain forward-looking signals, Sasken Technologies sustained solid returns over the last few months and may actually be approaching a breakup point.

Navin Fluorine Inter

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Navin Fluorine International are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite unsteady basic indicators, Navin Fluorine may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Sasken Technologies and Navin Fluorine

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

The idea behind Sasken Technologies Limited and Navin Fluorine 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.