Correlation Between AZZ Incorporated and Samfine Creation

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

By analyzing existing cross correlation between AZZ Incorporated and Samfine Creation Holdings, you can compare the effects of market volatilities on AZZ Incorporated and Samfine Creation 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 AZZ Incorporated with a short position of Samfine Creation. Check out your portfolio center. Please also check ongoing floating volatility patterns of AZZ Incorporated and Samfine Creation.

Diversification Opportunities for AZZ Incorporated and Samfine Creation

0.2

Correlation Coefficient

AZZ Incorporated  Samfine Creation

Modest diversification

The 3 months correlation between AZZ and Samfine is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding AZZ Incorporated and Samfine Creation Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samfine Creation Holdings and AZZ Incorporated 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 AZZ Incorporated are associated (or correlated) with Samfine Creation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samfine Creation Holdings has no effect on the direction of AZZ Incorporated i.e., AZZ Incorporated and Samfine Creation go up and down completely randomly.

Pair Corralation between AZZ Incorporated and Samfine Creation

Considering the 90-day investment horizon AZZ Incorporated is expected to generate 17.32 times less return on investment than Samfine Creation. But when comparing it to its historical volatility, AZZ Incorporated is 4.75 times less risky than Samfine Creation. It trades about 0.07 of its potential returns per unit of risk. Samfine Creation Holdings is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest  530.00  in Samfine Creation Holdings on August 30, 2024 and sell it today you would earn a total of  651.00  from holding Samfine Creation Holdings or generate 122.83% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	51.56%
Values	Daily Returns

AZZ Incorporated  vs.  Samfine Creation Holdings

AZZ Incorporated

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in AZZ Incorporated are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, AZZ Incorporated may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Samfine Creation Holdings

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Samfine Creation Holdings are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady technical indicators, Samfine Creation reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AZZ Incorporated and Samfine Creation

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

The idea behind AZZ Incorporated and Samfine Creation Holdings 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.