Correlation Between Kordellos and Sidma SA

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

By analyzing existing cross correlation between Kordellos Ch Bros and Sidma SA Steel, you can compare the effects of market volatilities on Kordellos and Sidma SA 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 Kordellos with a short position of Sidma SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kordellos and Sidma SA.

Diversification Opportunities for Kordellos and Sidma SA

0.55

Correlation Coefficient

Kordellos  Sidma SA

Very weak diversification

The 3 months correlation between Kordellos and Sidma is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Kordellos Ch Bros and Sidma SA Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sidma SA Steel and Kordellos 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 Kordellos Ch Bros are associated (or correlated) with Sidma SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sidma SA Steel has no effect on the direction of Kordellos i.e., Kordellos and Sidma SA go up and down completely randomly.

Pair Corralation between Kordellos and Sidma SA

Assuming the 90 days trading horizon Kordellos Ch Bros is expected to under-perform the Sidma SA. In addition to that, Kordellos is 1.13 times more volatile than Sidma SA Steel. It trades about -0.07 of its total potential returns per unit of risk. Sidma SA Steel is currently generating about -0.07 per unit of volatility. If you would invest  169.00  in Sidma SA Steel on September 4, 2024 and sell it today you would lose (13.00) from holding Sidma SA Steel or give up 7.69% of portfolio value over 90 days.

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

Kordellos Ch Bros  vs.  Sidma SA Steel

Kordellos Ch Bros

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kordellos Ch Bros has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Sidma SA Steel

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sidma SA Steel has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Kordellos and Sidma SA

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

The idea behind Kordellos Ch Bros and Sidma SA Steel 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.