Correlation Between Sify Technologies and Vodafone Group

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

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

Diversification Opportunities for Sify Technologies and Vodafone Group

-0.39

Correlation Coefficient

Sify Technologies  Vodafone Group

Very good diversification

The 3 months correlation between Sify and Vodafone is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Sify Technologies Limited and Vodafone Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vodafone Group PLC and Sify 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 Sify Technologies Limited are associated (or correlated) with Vodafone Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vodafone Group PLC has no effect on the direction of Sify Technologies i.e., Sify Technologies and Vodafone Group go up and down completely randomly.

Pair Corralation between Sify Technologies and Vodafone Group

Given the investment horizon of 90 days Sify Technologies Limited is expected to generate 4.32 times more return on investment than Vodafone Group. However, Sify Technologies is 4.32 times more volatile than Vodafone Group PLC. It trades about 0.0 of its potential returns per unit of risk. Vodafone Group PLC is currently generating about -0.05 per unit of risk. If you would invest  397.00  in Sify Technologies Limited on September 2, 2024 and sell it today you would lose (51.00) from holding Sify Technologies Limited or give up 12.85% of portfolio value over 90 days.

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

Sify Technologies Limited  vs.  Vodafone Group PLC

Sify Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sify Technologies Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical and fundamental indicators, Sify Technologies is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Vodafone Group PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vodafone Group PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Vodafone Group is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Sify Technologies and Vodafone Group

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

The idea behind Sify Technologies Limited and Vodafone Group PLC 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 Global Correlations module to find global opportunities by holding instruments from different markets.