Correlation Between Sharps Technology and CeCors

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

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

Diversification Opportunities for Sharps Technology and CeCors

0.81

Correlation Coefficient

Sharps Technology  CeCors

Very poor diversification

The 3 months correlation between Sharps and CeCors is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Sharps Technology and CeCors Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CeCors Inc and Sharps Technology 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 Sharps Technology are associated (or correlated) with CeCors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CeCors Inc has no effect on the direction of Sharps Technology i.e., Sharps Technology and CeCors go up and down completely randomly.

Pair Corralation between Sharps Technology and CeCors

Given the investment horizon of 90 days Sharps Technology is expected to under-perform the CeCors. But the stock apears to be less risky and, when comparing its historical volatility, Sharps Technology is 1.78 times less risky than CeCors. The stock trades about -0.07 of its potential returns per unit of risk. The CeCors Inc is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  3.00  in CeCors Inc on August 31, 2024 and sell it today you would lose (0.30) from holding CeCors Inc or give up 10.0% of portfolio value over 90 days.

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

Sharps Technology  vs.  CeCors Inc

Sharps Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sharps Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in December 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

CeCors Inc

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in CeCors Inc are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, CeCors unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sharps Technology and CeCors

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

The idea behind Sharps Technology and CeCors Inc 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.