Correlation Between Comvex SA and Societatea Nationala

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

By analyzing existing cross correlation between Comvex SA and Societatea Nationala de, you can compare the effects of market volatilities on Comvex SA and Societatea Nationala 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 Societatea Nationala. Check out your portfolio center. Please also check ongoing floating volatility patterns of Comvex SA and Societatea Nationala.

Diversification Opportunities for Comvex SA and Societatea Nationala

-0.68

Correlation Coefficient

Comvex SA  Societatea Nationala

Excellent diversification

The 3 months correlation between Comvex and Societatea is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Comvex SA and Societatea Nationala de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Societatea Nationala 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 Societatea Nationala. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Societatea Nationala has no effect on the direction of Comvex SA i.e., Comvex SA and Societatea Nationala go up and down completely randomly.

Pair Corralation between Comvex SA and Societatea Nationala

Assuming the 90 days trading horizon Comvex SA is expected to under-perform the Societatea Nationala. In addition to that, Comvex SA is 2.09 times more volatile than Societatea Nationala de. It trades about -0.01 of its total potential returns per unit of risk. Societatea Nationala de is currently generating about 0.18 per unit of volatility. If you would invest  531.00  in Societatea Nationala de on December 24, 2024 and sell it today you would earn a total of  60.00  from holding Societatea Nationala de or generate 11.3% return on investment over 90 days.

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

Comvex SA  vs.  Societatea Nationala de

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.

Societatea Nationala

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Societatea Nationala de are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical and fundamental indicators, Societatea Nationala may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Comvex SA and Societatea Nationala

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

The idea behind Comvex SA and Societatea Nationala de 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.