Correlation Between North East and Silicon Craft

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

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

Diversification Opportunities for North East and Silicon Craft

0.32

Correlation Coefficient

North East  Silicon Craft

Weak diversification

The 3 months correlation between North and Silicon is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding North East Rubbers and Silicon Craft Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silicon Craft Technology and North East 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 North East Rubbers are associated (or correlated) with Silicon Craft. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silicon Craft Technology has no effect on the direction of North East i.e., North East and Silicon Craft go up and down completely randomly.

Pair Corralation between North East and Silicon Craft

Assuming the 90 days trading horizon North East Rubbers is expected to generate 1.02 times more return on investment than Silicon Craft. However, North East is 1.02 times more volatile than Silicon Craft Technology. It trades about 0.07 of its potential returns per unit of risk. Silicon Craft Technology is currently generating about -0.09 per unit of risk. If you would invest  405.00  in North East Rubbers on April 20, 2025 and sell it today you would earn a total of  25.00  from holding North East Rubbers or generate 6.17% return on investment over 90 days.

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

North East Rubbers  vs.  Silicon Craft Technology

North East Rubbers

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in North East Rubbers are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, North East may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Silicon Craft Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days Silicon Craft Technology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's forward-looking signals remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with North East and Silicon Craft

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

The idea behind North East Rubbers and Silicon Craft 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.