Correlation Between Samebest and Chernan Metal

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

By analyzing existing cross correlation between Samebest Co and Chernan Metal Industrial, you can compare the effects of market volatilities on Samebest and Chernan Metal 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 Samebest with a short position of Chernan Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samebest and Chernan Metal.

Diversification Opportunities for Samebest and Chernan Metal

-0.21

Correlation Coefficient

Samebest  Chernan Metal

Very good diversification

The 3 months correlation between Samebest and Chernan is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Samebest Co and Chernan Metal Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chernan Metal Industrial and Samebest 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 Samebest Co are associated (or correlated) with Chernan Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chernan Metal Industrial has no effect on the direction of Samebest i.e., Samebest and Chernan Metal go up and down completely randomly.

Pair Corralation between Samebest and Chernan Metal

Assuming the 90 days trading horizon Samebest Co is expected to generate 1.14 times more return on investment than Chernan Metal. However, Samebest is 1.14 times more volatile than Chernan Metal Industrial. It trades about 0.06 of its potential returns per unit of risk. Chernan Metal Industrial is currently generating about 0.0 per unit of risk. If you would invest  3,400  in Samebest Co on December 25, 2024 and sell it today you would earn a total of  270.00  from holding Samebest Co or generate 7.94% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.21%
Values	Daily Returns

Samebest Co  vs.  Chernan Metal Industrial

Samebest

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Samebest Co are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Samebest may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Chernan Metal Industrial

Risk-Adjusted Performance

Very Weak

Over the last 90 days Chernan Metal Industrial has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Chernan Metal is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Samebest and Chernan Metal

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

The idea behind Samebest Co and Chernan Metal Industrial 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.