Correlation Between Comvex SA and Compa Sibiu

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

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

Diversification Opportunities for Comvex SA and Compa Sibiu

0.47

Correlation Coefficient

Comvex SA  Compa Sibiu

Very weak diversification

The 3 months correlation between Comvex and Compa is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Comvex SA and Compa Sibiu in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compa Sibiu and Comvex SA 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 Comvex SA are associated (or correlated) with Compa Sibiu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compa Sibiu has no effect on the direction of Comvex SA i.e., Comvex SA and Compa Sibiu go up and down completely randomly.

Pair Corralation between Comvex SA and Compa Sibiu

Assuming the 90 days trading horizon Comvex SA is expected to under-perform the Compa Sibiu. In addition to that, Comvex SA is 1.0 times more volatile than Compa Sibiu. It trades about -0.04 of its total potential returns per unit of risk. Compa Sibiu is currently generating about -0.02 per unit of volatility. If you would invest  53.00  in Compa Sibiu on December 30, 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	100.0%
Values	Daily Returns

Comvex SA  vs.  Compa Sibiu

Comvex SA

Risk-Adjusted Performance

Very Weak

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

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.

Pair Trading with Comvex SA and Compa Sibiu

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

The idea behind Comvex SA and Compa Sibiu 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.

Check out your portfolio center.

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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.