Correlation Between Dev Information and Selan Exploration

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

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

Diversification Opportunities for Dev Information and Selan Exploration

0.49

Correlation Coefficient

Dev Information  Selan Exploration

Very weak diversification

The 3 months correlation between Dev and Selan is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Dev Information Technology and Selan Exploration Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Selan Exploration and Dev Information 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 Dev Information Technology are associated (or correlated) with Selan Exploration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Selan Exploration has no effect on the direction of Dev Information i.e., Dev Information and Selan Exploration go up and down completely randomly.

Pair Corralation between Dev Information and Selan Exploration

Assuming the 90 days trading horizon Dev Information is expected to generate 25.72 times less return on investment than Selan Exploration. But when comparing it to its historical volatility, Dev Information Technology is 1.03 times less risky than Selan Exploration. It trades about 0.0 of its potential returns per unit of risk. Selan Exploration Technology is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  55,920  in Selan Exploration Technology on April 23, 2025 and sell it today you would earn a total of  9,455  from holding Selan Exploration Technology or generate 16.91% return on investment over 90 days.

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

Dev Information Technology  vs.  Selan Exploration Technology

Dev Information Tech

Risk-Adjusted Performance

Very Weak

Over the last 90 days Dev Information Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Dev Information is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Selan Exploration

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Selan Exploration Technology are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady essential indicators, Selan Exploration displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Dev Information and Selan Exploration

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

The idea behind Dev Information Technology and Selan Exploration Technology 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.