Correlation Between SIG Combibloc and SNC Lavalin

Can any of the company-specific risk be diversified away by investing in both SIG Combibloc and SNC Lavalin 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 SNC Lavalin 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 SNC Lavalin Group, you can compare the effects of market volatilities on SIG Combibloc and SNC Lavalin 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 SNC Lavalin. Check out your portfolio center. Please also check ongoing floating volatility patterns of SIG Combibloc and SNC Lavalin.

Diversification Opportunities for SIG Combibloc and SNC Lavalin

-0.52

Correlation Coefficient

SIG Combibloc  SNC Lavalin

Excellent diversification

The 3 months correlation between SIG and SNC is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding SIG Combibloc Group and SNC Lavalin Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SNC Lavalin Group 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 SNC Lavalin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SNC Lavalin Group has no effect on the direction of SIG Combibloc i.e., SIG Combibloc and SNC Lavalin go up and down completely randomly.

Pair Corralation between SIG Combibloc and SNC Lavalin

Assuming the 90 days horizon SIG Combibloc is expected to generate 6.16 times less return on investment than SNC Lavalin. But when comparing it to its historical volatility, SIG Combibloc Group is 2.45 times less risky than SNC Lavalin. It trades about 0.12 of its potential returns per unit of risk. SNC Lavalin Group is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest  5,210  in SNC Lavalin Group on October 27, 2024 and sell it today you would earn a total of  606.00  from holding SNC Lavalin Group or generate 11.63% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.0%
Values	Daily Returns

SIG Combibloc Group  vs.  SNC Lavalin Group

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 latest fragile performance, the Stock's technical and fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

SNC Lavalin Group

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SNC Lavalin Group are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, SNC Lavalin reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SIG Combibloc and SNC Lavalin

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

The idea behind SIG Combibloc Group and SNC Lavalin 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.