Correlation Between Ferm Casino and SA Catana

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

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

Diversification Opportunities for Ferm Casino and SA Catana

-0.24

Correlation Coefficient

Ferm Casino  SA Catana

Very good diversification

The 3 months correlation between Ferm and CATG is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Ferm Casino Mun and SA Catana Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SA Catana Group and Ferm Casino 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 Ferm Casino Mun are associated (or correlated) with SA Catana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SA Catana Group has no effect on the direction of Ferm Casino i.e., Ferm Casino and SA Catana go up and down completely randomly.

Pair Corralation between Ferm Casino and SA Catana

Assuming the 90 days trading horizon Ferm Casino Mun is expected to under-perform the SA Catana. But the stock apears to be less risky and, when comparing its historical volatility, Ferm Casino Mun is 2.17 times less risky than SA Catana. The stock trades about -0.01 of its potential returns per unit of risk. The SA Catana Group is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  505.00  in SA Catana Group on September 13, 2024 and sell it today you would lose (6.00) from holding SA Catana Group or give up 1.19% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

Ferm Casino Mun  vs.  SA Catana Group

Ferm Casino Mun

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ferm Casino Mun has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Ferm Casino is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

SA Catana Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SA Catana Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, SA Catana is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Ferm Casino and SA Catana

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

The idea behind Ferm Casino Mun and SA Catana Group 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.