Correlation Between Ditto Public and SiS Distribution

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

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

Diversification Opportunities for Ditto Public and SiS Distribution

0.82

Correlation Coefficient

Ditto Public  SiS Distribution

Very poor diversification

The 3 months correlation between Ditto and SiS is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Ditto Public and SiS Distribution Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SiS Distribution Public and Ditto Public 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 Ditto Public are associated (or correlated) with SiS Distribution. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SiS Distribution Public has no effect on the direction of Ditto Public i.e., Ditto Public and SiS Distribution go up and down completely randomly.

Pair Corralation between Ditto Public and SiS Distribution

Assuming the 90 days trading horizon Ditto Public is expected to under-perform the SiS Distribution. In addition to that, Ditto Public is 1.34 times more volatile than SiS Distribution Public. It trades about -0.04 of its total potential returns per unit of risk. SiS Distribution Public is currently generating about 0.02 per unit of volatility. If you would invest  2,190  in SiS Distribution Public on April 24, 2025 and sell it today you would earn a total of  30.00  from holding SiS Distribution Public or generate 1.37% return on investment over 90 days.

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

Ditto Public  vs.  SiS Distribution Public

Ditto Public

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ditto Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's fundamental drivers remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

SiS Distribution Public

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in SiS Distribution Public are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, SiS Distribution is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Ditto Public and SiS Distribution

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

The idea behind Ditto Public and SiS Distribution Public 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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.