Correlation Between Silver Touch and Max Financial

Can any of the company-specific risk be diversified away by investing in both Silver Touch and Max Financial 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 Silver Touch and Max Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Silver Touch Technologies and Max Financial Services, you can compare the effects of market volatilities on Silver Touch and Max Financial 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 Silver Touch with a short position of Max Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Silver Touch and Max Financial.

Diversification Opportunities for Silver Touch and Max Financial

0.18

Correlation Coefficient

Silver Touch  Max Financial

Average diversification

The 3 months correlation between Silver and Max is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Silver Touch Technologies and Max Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Max Financial Services and Silver Touch 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 Silver Touch Technologies are associated (or correlated) with Max Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Max Financial Services has no effect on the direction of Silver Touch i.e., Silver Touch and Max Financial go up and down completely randomly.

Pair Corralation between Silver Touch and Max Financial

Assuming the 90 days trading horizon Silver Touch is expected to generate 19.19 times less return on investment than Max Financial. But when comparing it to its historical volatility, Silver Touch Technologies is 1.26 times less risky than Max Financial. It trades about 0.0 of its potential returns per unit of risk. Max Financial Services is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  93,015  in Max Financial Services on September 20, 2024 and sell it today you would earn a total of  21,225  from holding Max Financial Services or generate 22.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	99.18%
Values	Daily Returns

Silver Touch Technologies  vs.  Max Financial Services

Silver Touch Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Silver Touch Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Max Financial Services

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Max Financial Services has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Max Financial is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Silver Touch and Max Financial

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

The idea behind Silver Touch Technologies and Max Financial Services 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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .