Correlation Between Camau Trading and Sao Ta

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

By analyzing existing cross correlation between Camau Trading JSC and Sao Ta Foods, you can compare the effects of market volatilities on Camau Trading and Sao Ta 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 Camau Trading with a short position of Sao Ta. Check out your portfolio center. Please also check ongoing floating volatility patterns of Camau Trading and Sao Ta.

Diversification Opportunities for Camau Trading and Sao Ta

-0.29

Correlation Coefficient

Camau Trading  Sao Ta

Very good diversification

The 3 months correlation between Camau and Sao is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Camau Trading JSC and Sao Ta Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sao Ta Foods and Camau Trading 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 Camau Trading JSC are associated (or correlated) with Sao Ta. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sao Ta Foods has no effect on the direction of Camau Trading i.e., Camau Trading and Sao Ta go up and down completely randomly.

Pair Corralation between Camau Trading and Sao Ta

Assuming the 90 days trading horizon Camau Trading is expected to generate 1.43 times less return on investment than Sao Ta. In addition to that, Camau Trading is 2.01 times more volatile than Sao Ta Foods. It trades about 0.02 of its total potential returns per unit of risk. Sao Ta Foods is currently generating about 0.05 per unit of volatility. If you would invest  3,457,019  in Sao Ta Foods on October 11, 2024 and sell it today you would earn a total of  1,187,981  from holding Sao Ta Foods or generate 34.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	71.69%
Values	Daily Returns

Camau Trading JSC  vs.  Sao Ta Foods

Camau Trading JSC

Risk-Adjusted Performance

0 of 100

Very Weak

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

Sao Ta Foods

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Camau Trading and Sao Ta

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

The idea behind Camau Trading JSC and Sao Ta Foods 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.