Correlation Between Idico JSC and SSIAM VNFIN

Can any of the company-specific risk be diversified away by investing in both Idico JSC and SSIAM VNFIN 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 Idico JSC and SSIAM VNFIN into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Idico JSC and SSIAM VNFIN LEAD, you can compare the effects of market volatilities on Idico JSC and SSIAM VNFIN 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 Idico JSC with a short position of SSIAM VNFIN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Idico JSC and SSIAM VNFIN.

Diversification Opportunities for Idico JSC and SSIAM VNFIN

0.12

Correlation Coefficient

Idico JSC  SSIAM VNFIN

Average diversification

The 3 months correlation between Idico and SSIAM is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Idico JSC and SSIAM VNFIN LEAD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SSIAM VNFIN LEAD and Idico JSC 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 Idico JSC are associated (or correlated) with SSIAM VNFIN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SSIAM VNFIN LEAD has no effect on the direction of Idico JSC i.e., Idico JSC and SSIAM VNFIN go up and down completely randomly.

Pair Corralation between Idico JSC and SSIAM VNFIN

Assuming the 90 days trading horizon Idico JSC is expected to under-perform the SSIAM VNFIN. In addition to that, Idico JSC is 1.02 times more volatile than SSIAM VNFIN LEAD. It trades about -0.06 of its total potential returns per unit of risk. SSIAM VNFIN LEAD is currently generating about 0.15 per unit of volatility. If you would invest  2,214,000  in SSIAM VNFIN LEAD on December 30, 2024 and sell it today you would earn a total of  196,000  from holding SSIAM VNFIN LEAD or generate 8.85% return on investment over 90 days.

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

Idico JSC  vs.  SSIAM VNFIN LEAD

Idico JSC

Risk-Adjusted Performance

Very Weak

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

SSIAM VNFIN LEAD

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SSIAM VNFIN LEAD are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, SSIAM VNFIN may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Idico JSC and SSIAM VNFIN

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

The idea behind Idico JSC and SSIAM VNFIN LEAD 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.