Correlation Between Compa Sibiu and Feper SA

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

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

Diversification Opportunities for Compa Sibiu and Feper SA

0.41

Correlation Coefficient

Compa Sibiu  Feper SA

Very weak diversification

The 3 months correlation between Compa and Feper is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Compa Sibiu and Feper SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Feper SA and Compa Sibiu 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 Compa Sibiu are associated (or correlated) with Feper SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Feper SA has no effect on the direction of Compa Sibiu i.e., Compa Sibiu and Feper SA go up and down completely randomly.

Pair Corralation between Compa Sibiu and Feper SA

Assuming the 90 days trading horizon Compa Sibiu is expected to generate 0.65 times more return on investment than Feper SA. However, Compa Sibiu is 1.55 times less risky than Feper SA. It trades about -0.02 of its potential returns per unit of risk. Feper SA is currently generating about -0.07 per unit of risk. If you would invest  53.00  in Compa Sibiu on December 29, 2024 and sell it today you would lose (2.00) from holding Compa Sibiu or give up 3.77% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.33%
Values	Daily Returns

Compa Sibiu  vs.  Feper SA

Compa Sibiu

Risk-Adjusted Performance

Very Weak

Over the last 90 days Compa Sibiu has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Compa Sibiu is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Feper SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Feper SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Compa Sibiu and Feper SA

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

The idea behind Compa Sibiu and Feper SA 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.