Correlation Between Silicon Craft and General Environmental

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

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

Diversification Opportunities for Silicon Craft and General Environmental

0.17

Correlation Coefficient

Silicon Craft  General Environmental

Average diversification

The 3 months correlation between Silicon and General is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Silicon Craft Technology and General Environmental Conserva in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on General Environmental and Silicon Craft 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 Silicon Craft Technology are associated (or correlated) with General Environmental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of General Environmental has no effect on the direction of Silicon Craft i.e., Silicon Craft and General Environmental go up and down completely randomly.

Pair Corralation between Silicon Craft and General Environmental

Assuming the 90 days trading horizon Silicon Craft Technology is expected to under-perform the General Environmental. In addition to that, Silicon Craft is 2.0 times more volatile than General Environmental Conservation. It trades about -0.07 of its total potential returns per unit of risk. General Environmental Conservation is currently generating about 0.03 per unit of volatility. If you would invest  47.00  in General Environmental Conservation on September 5, 2024 and sell it today you would earn a total of  1.00  from holding General Environmental Conservation or generate 2.13% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Silicon Craft Technology  vs.  General Environmental Conserva

Silicon Craft Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Silicon Craft Technology 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 forward-looking signals remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

General Environmental

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in General Environmental Conservation are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong fundamental drivers, General Environmental is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Silicon Craft and General Environmental

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

The idea behind Silicon Craft Technology and General Environmental Conservation 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.