Correlation Between Copper For and Sidi Kerir

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

By analyzing existing cross correlation between Copper For Commercial and Sidi Kerir Petrochemicals, you can compare the effects of market volatilities on Copper For and Sidi Kerir 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 Copper For with a short position of Sidi Kerir. Check out your portfolio center. Please also check ongoing floating volatility patterns of Copper For and Sidi Kerir.

Diversification Opportunities for Copper For and Sidi Kerir

0.46

Correlation Coefficient

Copper For  Sidi Kerir

Very weak diversification

The 3 months correlation between Copper and Sidi is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Copper For Commercial and Sidi Kerir Petrochemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sidi Kerir Petrochemicals and Copper For 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 Copper For Commercial are associated (or correlated) with Sidi Kerir. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sidi Kerir Petrochemicals has no effect on the direction of Copper For i.e., Copper For and Sidi Kerir go up and down completely randomly.

Pair Corralation between Copper For and Sidi Kerir

Assuming the 90 days trading horizon Copper For Commercial is expected to under-perform the Sidi Kerir. But the stock apears to be less risky and, when comparing its historical volatility, Copper For Commercial is 1.43 times less risky than Sidi Kerir. The stock trades about -0.27 of its potential returns per unit of risk. The Sidi Kerir Petrochemicals is currently generating about -0.18 of returns per unit of risk over similar time horizon. If you would invest  2,055  in Sidi Kerir Petrochemicals on October 10, 2024 and sell it today you would lose (155.00) from holding Sidi Kerir Petrochemicals or give up 7.54% of portfolio value over 90 days.

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

Copper For Commercial  vs.  Sidi Kerir Petrochemicals

Copper For Commercial

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Copper For Commercial has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Copper For is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Sidi Kerir Petrochemicals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sidi Kerir Petrochemicals has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Copper For and Sidi Kerir

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

The idea behind Copper For Commercial and Sidi Kerir Petrochemicals 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 Anywhere module to track or share privately all of your investments from the convenience of any device.