Correlation Between Spuntech and Abra Information

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

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

Diversification Opportunities for Spuntech and Abra Information

0.06

Correlation Coefficient

Spuntech  Abra Information

Significant diversification

The 3 months correlation between Spuntech and Abra is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Spuntech and Abra Information Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Abra Information Tec and Spuntech 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 Spuntech are associated (or correlated) with Abra Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Abra Information Tec has no effect on the direction of Spuntech i.e., Spuntech and Abra Information go up and down completely randomly.

Pair Corralation between Spuntech and Abra Information

Assuming the 90 days trading horizon Spuntech is expected to generate 1.91 times less return on investment than Abra Information. In addition to that, Spuntech is 1.54 times more volatile than Abra Information Technologies. It trades about 0.05 of its total potential returns per unit of risk. Abra Information Technologies is currently generating about 0.14 per unit of volatility. If you would invest  25,470  in Abra Information Technologies on September 17, 2024 and sell it today you would earn a total of  3,720  from holding Abra Information Technologies or generate 14.61% return on investment over 90 days.

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

Spuntech  vs.  Abra Information Technologies

Spuntech

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Spuntech are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Spuntech may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Abra Information Tec

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Abra Information Technologies are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Abra Information sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Spuntech and Abra Information

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

The idea behind Spuntech and Abra Information Technologies 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.