Correlation Between Neometals and Sligro Food

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

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

Diversification Opportunities for Neometals and Sligro Food

0.22

Correlation Coefficient

Neometals  Sligro Food

Modest diversification

The 3 months correlation between Neometals and Sligro is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Neometals and Sligro Food Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sligro Food Group and Neometals 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 Neometals are associated (or correlated) with Sligro Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sligro Food Group has no effect on the direction of Neometals i.e., Neometals and Sligro Food go up and down completely randomly.

Pair Corralation between Neometals and Sligro Food

Assuming the 90 days trading horizon Neometals is expected to under-perform the Sligro Food. In addition to that, Neometals is 6.21 times more volatile than Sligro Food Group. It trades about -0.05 of its total potential returns per unit of risk. Sligro Food Group is currently generating about 0.04 per unit of volatility. If you would invest  1,074  in Sligro Food Group on November 29, 2024 and sell it today you would earn a total of  31.00  from holding Sligro Food Group or generate 2.89% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	72.13%
Values	Daily Returns

Neometals  vs.  Sligro Food Group

Neometals

Risk-Adjusted Performance

Very Weak

Over the last 90 days Neometals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in March 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Sligro Food Group

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Sligro Food Group are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Sligro Food is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Neometals and Sligro Food

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

The idea behind Neometals and Sligro Food 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.

Check out your portfolio center.

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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.