Correlation Between Defentect and Sify Technologies

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

By analyzing existing cross correlation between Defentect Group and Sify Technologies Limited, you can compare the effects of market volatilities on Defentect and Sify 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 Defentect with a short position of Sify Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Defentect and Sify Technologies.

Diversification Opportunities for Defentect and Sify Technologies

0.06

Correlation Coefficient

Defentect  Sify Technologies

Significant diversification

The 3 months correlation between Defentect and Sify is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Defentect Group and Sify Technologies Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sify Technologies and Defentect 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 Defentect Group are associated (or correlated) with Sify Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sify Technologies has no effect on the direction of Defentect i.e., Defentect and Sify Technologies go up and down completely randomly.

Pair Corralation between Defentect and Sify Technologies

Given the investment horizon of 90 days Defentect Group is expected to under-perform the Sify Technologies. In addition to that, Defentect is 1.82 times more volatile than Sify Technologies Limited. It trades about -0.01 of its total potential returns per unit of risk. Sify Technologies Limited is currently generating about 0.15 per unit of volatility. If you would invest  411.00  in Sify Technologies Limited on April 21, 2025 and sell it today you would earn a total of  146.00  from holding Sify Technologies Limited or generate 35.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	96.92%
Values	Daily Returns

Defentect Group  vs.  Sify Technologies Limited

Defentect Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Defentect Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Defentect is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Sify Technologies

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sify Technologies Limited are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady technical and fundamental indicators, Sify Technologies showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Defentect and Sify Technologies

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

The idea behind Defentect Group and Sify Technologies Limited 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.

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 the Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.