Correlation Between Picc Prop and SSC Technologies

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Can any of the company-specific risk be diversified away by investing in both Picc Prop and SSC Technologies 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 Picc Prop and SSC Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Picc Prop Casualty and SSC Technologies, you can compare the effects of market volatilities on Picc Prop and SSC Technologies 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 Picc Prop with a short position of SSC Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Picc Prop and SSC Technologies.

Diversification Opportunities for Picc Prop and SSC Technologies

-0.31
  Correlation Coefficient

Very good diversification

The 3 months correlation between PPCCF and SSC Technologies is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Picc Prop Casualty and SSC Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SSC Technologies and Picc Prop 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 Picc Prop Casualty are associated (or correlated) with SSC Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SSC Technologies has no effect on the direction of Picc Prop i.e., Picc Prop and SSC Technologies go up and down completely randomly.

Pair Corralation between Picc Prop and SSC Technologies

Assuming the 90 days horizon Picc Prop Casualty is expected to generate 1.04 times more return on investment than SSC Technologies. However, Picc Prop is 1.04 times more volatile than SSC Technologies. It trades about 0.21 of its potential returns per unit of risk. SSC Technologies is currently generating about -0.19 per unit of risk. If you would invest  96.00  in Picc Prop Casualty on April 8, 2022 and sell it today you would earn a total of  9.00  from holding Picc Prop Casualty or generate 9.38% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Picc Prop Casualty  vs.  SSC Technologies

 Performance (%) 
      Timeline 
Picc Prop Casualty 
PPCCF Performance
10 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Picc Prop Casualty are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak fundamental indicators, Picc Prop may actually be approaching a critical reversion point that can send shares even higher in August 2022.

Structure and Payout Changes

Forward Annual Dividend Yield
0.0599
Payout Ratio
0.38
Last Split Factor
3:2
Forward Annual Dividend Rate
0.06
Dividend Date
2017-08-22
Ex Dividend Date
2022-06-23
Last Split Date
2018-06-27

PPCCF Price Channel

SSC Technologies 
SSC Technologies Performance
0 of 100
Over the last 90 days SSC Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in August 2022. The current disturbance may also be a sign of long term up-swing for the company investors.

Structure and Payout Changes

Forward Annual Dividend Yield
0.0136
Payout Ratio
0.15
Last Split Factor
2:1
Forward Annual Dividend Rate
0.8
Dividend Date
2022-06-15
Ex Dividend Date
2022-05-31
Last Split Date
2016-06-27

SSC Technologies Price Channel

Picc Prop and SSC Technologies Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Picc Prop and SSC Technologies

The main advantage of trading using opposite Picc Prop and SSC Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Picc Prop position performs unexpectedly, SSC Technologies 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 SSC Technologies will offset losses from the drop in SSC Technologies' long position.
The idea behind Picc Prop Casualty and SSC Technologies 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.

SSC Technologies

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The effect of pair diversification on risk is to reduce it, but we should note this doesn't apply to all risk types. When we trade pairs against SSC Technologies as a counterpart, there is always some inherent risk that will never be diversified away no matter what. This volatility limits the effect of tactical diversification using pair trading. SSC Technologies' systematic risk is the inherent uncertainty of the entire market, and therefore cannot be mitigated even by pair-trading it against the equity that is not highly correlated to it. On the other hand, SSC Technologies' unsystematic risk describes the types of risk that we can protect against, at least to some degree, by selecting a matching pair that is not perfectly correlated to SSC Technologies.
Check out your portfolio center. 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.

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