Correlation Between Sidma SA and Elvalhalcor Hellenic

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

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

Diversification Opportunities for Sidma SA and Elvalhalcor Hellenic

0.37

Correlation Coefficient

Sidma SA  Elvalhalcor Hellenic

Weak diversification

The 3 months correlation between Sidma and Elvalhalcor is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Sidma SA Steel and Elvalhalcor Hellenic Copper in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elvalhalcor Hellenic and Sidma SA 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 Sidma SA Steel are associated (or correlated) with Elvalhalcor Hellenic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elvalhalcor Hellenic has no effect on the direction of Sidma SA i.e., Sidma SA and Elvalhalcor Hellenic go up and down completely randomly.

Pair Corralation between Sidma SA and Elvalhalcor Hellenic

Assuming the 90 days trading horizon Sidma SA Steel is expected to under-perform the Elvalhalcor Hellenic. But the stock apears to be less risky and, when comparing its historical volatility, Sidma SA Steel is 1.12 times less risky than Elvalhalcor Hellenic. The stock trades about -0.04 of its potential returns per unit of risk. The Elvalhalcor Hellenic Copper is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  186.00  in Elvalhalcor Hellenic Copper on September 5, 2024 and sell it today you would earn a total of  6.00  from holding Elvalhalcor Hellenic Copper or generate 3.23% return on investment over 90 days.

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

Sidma SA Steel  vs.  Elvalhalcor Hellenic Copper

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 somewhat strong basic indicators, Sidma SA is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Elvalhalcor Hellenic

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Elvalhalcor Hellenic Copper are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Elvalhalcor Hellenic is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Sidma SA and Elvalhalcor Hellenic

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

The idea behind Sidma SA Steel and Elvalhalcor Hellenic Copper 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.