Correlation Between Feper SA and Santierul Naval

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

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

Diversification Opportunities for Feper SA and Santierul Naval

0.47

Correlation Coefficient

Feper SA  Santierul Naval

Very weak diversification

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

Pair Corralation between Feper SA and Santierul Naval

Assuming the 90 days trading horizon Feper SA is expected to generate 2.32 times more return on investment than Santierul Naval. However, Feper SA is 2.32 times more volatile than Santierul Naval Orsova. It trades about 0.0 of its potential returns per unit of risk. Santierul Naval Orsova is currently generating about -0.02 per unit of risk. If you would invest  22.00  in Feper SA on December 23, 2024 and sell it today you would lose (1.00) from holding Feper SA or give up 4.55% of portfolio value over 90 days.

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

Feper SA  vs.  Santierul Naval Orsova

Feper SA

Risk-Adjusted Performance

Very Weak

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

Santierul Naval Orsova

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Feper SA and Santierul Naval

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

The idea behind Feper SA and Santierul Naval Orsova 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.