Correlation Between Sdiptech and Online Brands

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

By analyzing existing cross correlation between Sdiptech AB and Online Brands Nordic, you can compare the effects of market volatilities on Sdiptech and Online Brands 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 Online Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sdiptech and Online Brands.

Diversification Opportunities for Sdiptech and Online Brands

-0.65

Correlation Coefficient

Sdiptech  Online Brands

Excellent diversification

The 3 months correlation between Sdiptech and Online is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Sdiptech AB and Online Brands Nordic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Online Brands Nordic 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 Online Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Online Brands Nordic has no effect on the direction of Sdiptech i.e., Sdiptech and Online Brands go up and down completely randomly.

Pair Corralation between Sdiptech and Online Brands

Assuming the 90 days trading horizon Sdiptech AB is expected to generate 0.97 times more return on investment than Online Brands. However, Sdiptech AB is 1.03 times less risky than Online Brands. It trades about 0.17 of its potential returns per unit of risk. Online Brands Nordic is currently generating about -0.03 per unit of risk. If you would invest  10,670  in Sdiptech AB on April 24, 2025 and sell it today you would earn a total of  2,580  from holding Sdiptech AB or generate 24.18% return on investment over 90 days.

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

Sdiptech AB  vs.  Online Brands Nordic

Sdiptech AB

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sdiptech AB are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Sdiptech reported solid returns over the last few months and may actually be approaching a breakup point.

Online Brands Nordic

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Sdiptech and Online Brands

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

The idea behind Sdiptech AB and Online Brands Nordic 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.