Correlation Between SG Blocks and TechPrecision Common

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

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

Diversification Opportunities for SG Blocks and TechPrecision Common

-0.26

Correlation Coefficient

SG Blocks  TechPrecision Common

Very good diversification

The 3 months correlation between SGBX and TechPrecision is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding SG Blocks and TechPrecision Common in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TechPrecision Common and SG Blocks 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 SG Blocks are associated (or correlated) with TechPrecision Common. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TechPrecision Common has no effect on the direction of SG Blocks i.e., SG Blocks and TechPrecision Common go up and down completely randomly.

Pair Corralation between SG Blocks and TechPrecision Common

Given the investment horizon of 90 days SG Blocks is expected to under-perform the TechPrecision Common. In addition to that, SG Blocks is 2.61 times more volatile than TechPrecision Common. It trades about -0.15 of its total potential returns per unit of risk. TechPrecision Common is currently generating about -0.28 per unit of volatility. If you would invest  486.00  in TechPrecision Common on March 9, 2024 and sell it today you would lose (116.00) from holding TechPrecision Common or give up 23.87% of portfolio value over 90 days.

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

SG Blocks  vs.  TechPrecision Common

SG Blocks

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in SG Blocks are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating fundamental drivers, SG Blocks showed solid returns over the last few months and may actually be approaching a breakup point.

TechPrecision Common

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with SG Blocks and TechPrecision Common

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

The idea behind SG Blocks and TechPrecision Common 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.