Correlation Between Sdiptech and Ratos AB

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

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

Diversification Opportunities for Sdiptech and Ratos AB

0.37

Correlation Coefficient

Sdiptech  Ratos AB

Weak diversification

The 3 months correlation between Sdiptech and Ratos is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Sdiptech AB and Ratos AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ratos 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 Ratos AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ratos AB has no effect on the direction of Sdiptech i.e., Sdiptech and Ratos AB go up and down completely randomly.

Pair Corralation between Sdiptech and Ratos AB

Assuming the 90 days trading horizon Sdiptech AB is expected to generate 1.11 times more return on investment than Ratos AB. However, Sdiptech is 1.11 times more volatile than Ratos AB. It trades about 0.17 of its potential returns per unit of risk. Ratos AB is currently generating about 0.08 per unit of risk. If you would invest  10,627  in Sdiptech AB on April 23, 2025 and sell it today you would earn a total of  2,573  from holding Sdiptech AB or generate 24.21% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.36%
Values	Daily Returns

Sdiptech AB  vs.  Ratos AB

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.

Ratos AB

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Ratos AB are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Ratos AB may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Sdiptech and Ratos AB

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

The idea behind Sdiptech AB and Ratos 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.