Correlation Between SSC Technologies and Petro Rio

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

By analyzing existing cross correlation between SSC Technologies Holdings, and Petro Rio SA, you can compare the effects of market volatilities on SSC Technologies and Petro Rio 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 SSC Technologies with a short position of Petro Rio. Check out your portfolio center. Please also check ongoing floating volatility patterns of SSC Technologies and Petro Rio.

Diversification Opportunities for SSC Technologies and Petro Rio

0.84

Correlation Coefficient

SSC Technologies  Petro Rio

Very poor diversification

The 3 months correlation between SSC and Petro is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding SSC Technologies Holdings, and Petro Rio SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Petro Rio SA and SSC Technologies 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 SSC Technologies Holdings, are associated (or correlated) with Petro Rio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Petro Rio SA has no effect on the direction of SSC Technologies i.e., SSC Technologies and Petro Rio go up and down completely randomly.

Pair Corralation between SSC Technologies and Petro Rio

Assuming the 90 days trading horizon SSC Technologies is expected to generate 132.03 times less return on investment than Petro Rio. But when comparing it to its historical volatility, SSC Technologies Holdings, is 86.28 times less risky than Petro Rio. It trades about 0.13 of its potential returns per unit of risk. Petro Rio SA is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  3,325  in Petro Rio SA on April 23, 2025 and sell it today you would earn a total of  951.00  from holding Petro Rio SA or generate 28.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.41%
Values	Daily Returns

SSC Technologies Holdings,  vs.  Petro Rio SA

SSC Technologies Hol

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SSC Technologies Holdings, are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, SSC Technologies is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Petro Rio SA

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Petro Rio SA are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Petro Rio unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SSC Technologies and Petro Rio

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

The idea behind SSC Technologies Holdings, and Petro Rio SA 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.

Check out your portfolio center.

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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.