Correlation Between Sdiptech and RVRC Holding

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

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

Diversification Opportunities for Sdiptech and RVRC Holding

-0.04

Correlation Coefficient

Sdiptech  RVRC Holding

Good diversification

The 3 months correlation between Sdiptech and RVRC is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Sdiptech AB and RVRC Holding AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RVRC Holding AB and Sdiptech 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 Sdiptech AB are associated (or correlated) with RVRC Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RVRC Holding AB has no effect on the direction of Sdiptech i.e., Sdiptech and RVRC Holding go up and down completely randomly.

Pair Corralation between Sdiptech and RVRC Holding

Assuming the 90 days trading horizon Sdiptech AB is expected to generate 1.02 times more return on investment than RVRC Holding. However, Sdiptech is 1.02 times more volatile than RVRC Holding AB. It trades about 0.05 of its potential returns per unit of risk. RVRC Holding AB is currently generating about 0.0 per unit of risk. If you would invest  18,450  in Sdiptech AB on April 22, 2025 and sell it today you would earn a total of  1,200  from holding Sdiptech AB or generate 6.5% return on investment over 90 days.

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

Sdiptech AB  vs.  RVRC Holding AB

Sdiptech AB

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Sdiptech AB are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak forward indicators, Sdiptech may actually be approaching a critical reversion point that can send shares even higher in August 2025.

RVRC Holding AB

Risk-Adjusted Performance

Very Weak

Over the last 90 days RVRC Holding AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, RVRC Holding is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Sdiptech and RVRC Holding

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

The idea behind Sdiptech AB and RVRC Holding AB 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.