Correlation Between SIG Combibloc and Acciona SA

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

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

Diversification Opportunities for SIG Combibloc and Acciona SA

0.67

Correlation Coefficient

SIG Combibloc  Acciona SA

Poor diversification

The 3 months correlation between SIG and Acciona is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding SIG Combibloc Group and Acciona SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acciona SA and SIG Combibloc 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 SIG Combibloc Group are associated (or correlated) with Acciona SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acciona SA has no effect on the direction of SIG Combibloc i.e., SIG Combibloc and Acciona SA go up and down completely randomly.

Pair Corralation between SIG Combibloc and Acciona SA

Assuming the 90 days horizon SIG Combibloc Group is expected to generate 0.2 times more return on investment than Acciona SA. However, SIG Combibloc Group is 4.91 times less risky than Acciona SA. It trades about 0.05 of its potential returns per unit of risk. Acciona SA is currently generating about -0.14 per unit of risk. If you would invest  1,962  in SIG Combibloc Group on October 12, 2024 and sell it today you would earn a total of  9.00  from holding SIG Combibloc Group or generate 0.46% return on investment over 90 days.

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

SIG Combibloc Group  vs.  Acciona SA

SIG Combibloc Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SIG Combibloc Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Acciona SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Acciona SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite abnormal performance in the last few months, the Stock's forward indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with SIG Combibloc and Acciona SA

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

The idea behind SIG Combibloc Group and Acciona SA 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.