Correlation Between Sure Tech and Sarine Technologies

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

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

Diversification Opportunities for Sure Tech and Sarine Technologies

-0.33

Correlation Coefficient

Sure Tech  Sarine Technologies

Very good diversification

The 3 months correlation between Sure and Sarine is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Sure Tech Investments LP and Sarine Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sarine Technologies and Sure Tech 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 Sure Tech Investments LP are associated (or correlated) with Sarine Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sarine Technologies has no effect on the direction of Sure Tech i.e., Sure Tech and Sarine Technologies go up and down completely randomly.

Pair Corralation between Sure Tech and Sarine Technologies

Assuming the 90 days trading horizon Sure Tech Investments LP is expected to generate 3.18 times more return on investment than Sarine Technologies. However, Sure Tech is 3.18 times more volatile than Sarine Technologies. It trades about 0.32 of its potential returns per unit of risk. Sarine Technologies is currently generating about -0.31 per unit of risk. If you would invest  59,500  in Sure Tech Investments LP on September 28, 2024 and sell it today you would earn a total of  17,710  from holding Sure Tech Investments LP or generate 29.76% return on investment over 90 days.

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

Sure Tech Investments LP  vs.  Sarine Technologies

Sure Tech Investments

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sure Tech Investments LP are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Sure Tech sustained solid returns over the last few months and may actually be approaching a breakup point.

Sarine Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sarine Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Sure Tech and Sarine Technologies

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

The idea behind Sure Tech Investments LP and Sarine 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.