Correlation Between Sdiptech and Rugvista Group

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

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

Diversification Opportunities for Sdiptech and Rugvista Group

0.63

Correlation Coefficient

Sdiptech  Rugvista Group

Poor diversification

The 3 months correlation between Sdiptech and Rugvista is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Sdiptech AB and Rugvista Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rugvista Group 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 Rugvista Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rugvista Group AB has no effect on the direction of Sdiptech i.e., Sdiptech and Rugvista Group go up and down completely randomly.

Pair Corralation between Sdiptech and Rugvista Group

Assuming the 90 days trading horizon Sdiptech is expected to generate 1.79 times less return on investment than Rugvista Group. But when comparing it to its historical volatility, Sdiptech AB is 1.41 times less risky than Rugvista Group. It trades about 0.19 of its potential returns per unit of risk. Rugvista Group AB is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest  4,584  in Rugvista Group AB on April 24, 2025 and sell it today you would earn a total of  2,376  from holding Rugvista Group AB or generate 51.83% return on investment over 90 days.

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

Sdiptech AB  vs.  Rugvista Group 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 14 (%) 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.

Rugvista Group AB

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Rugvista Group AB are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak technical and fundamental indicators, Rugvista Group unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sdiptech and Rugvista Group

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

The idea behind Sdiptech AB and Rugvista Group 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.