Correlation Between SA Catana and Derichebourg

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

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

Diversification Opportunities for SA Catana and Derichebourg

-0.43

Correlation Coefficient

SA Catana  Derichebourg

Very good diversification

The 3 months correlation between CATG and Derichebourg is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding SA Catana Group and Derichebourg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Derichebourg and SA Catana 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 SA Catana Group are associated (or correlated) with Derichebourg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Derichebourg has no effect on the direction of SA Catana i.e., SA Catana and Derichebourg go up and down completely randomly.

Pair Corralation between SA Catana and Derichebourg

Assuming the 90 days trading horizon SA Catana Group is expected to under-perform the Derichebourg. In addition to that, SA Catana is 1.16 times more volatile than Derichebourg. It trades about -0.04 of its total potential returns per unit of risk. Derichebourg is currently generating about 0.1 per unit of volatility. If you would invest  517.00  in Derichebourg on December 25, 2024 and sell it today you would earn a total of  59.00  from holding Derichebourg or generate 11.41% return on investment over 90 days.

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

SA Catana Group  vs.  Derichebourg

SA Catana Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days SA Catana Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, SA Catana is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Derichebourg

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Derichebourg are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak technical and fundamental indicators, Derichebourg may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with SA Catana and Derichebourg

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

The idea behind SA Catana Group and Derichebourg 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.