Correlation Between Sano Brunos and Salomon A

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

By analyzing existing cross correlation between Sano Brunos Enterprises and Salomon A Angel, you can compare the effects of market volatilities on Sano Brunos and Salomon A 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 Sano Brunos with a short position of Salomon A. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sano Brunos and Salomon A.

Diversification Opportunities for Sano Brunos and Salomon A

0.15

Correlation Coefficient

Sano Brunos  Salomon A

Average diversification

The 3 months correlation between Sano and Salomon is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Sano Brunos Enterprises and Salomon A Angel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Salomon A Angel and Sano Brunos 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 Sano Brunos Enterprises are associated (or correlated) with Salomon A. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Salomon A Angel has no effect on the direction of Sano Brunos i.e., Sano Brunos and Salomon A go up and down completely randomly.

Pair Corralation between Sano Brunos and Salomon A

Assuming the 90 days trading horizon Sano Brunos is expected to generate 1.12 times less return on investment than Salomon A. But when comparing it to its historical volatility, Sano Brunos Enterprises is 1.72 times less risky than Salomon A. It trades about 0.1 of its potential returns per unit of risk. Salomon A Angel is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  327,600  in Salomon A Angel on November 20, 2024 and sell it today you would earn a total of  29,200  from holding Salomon A Angel or generate 8.91% return on investment over 90 days.

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

Sano Brunos Enterprises  vs.  Salomon A Angel

Sano Brunos Enterprises

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sano Brunos Enterprises are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Sano Brunos unveiled solid returns over the last few months and may actually be approaching a breakup point.

Salomon A Angel

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Salomon A Angel are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Salomon A sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sano Brunos and Salomon A

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

The idea behind Sano Brunos Enterprises and Salomon A Angel 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.