Correlation Between Sisecam Resources and Tronox Holdings

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

By analyzing existing cross correlation between Sisecam Resources LP and Tronox Holdings PLC, you can compare the effects of market volatilities on Sisecam Resources and Tronox Holdings 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 Sisecam Resources with a short position of Tronox Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sisecam Resources and Tronox Holdings.

Diversification Opportunities for Sisecam Resources and Tronox Holdings

0.0

Correlation Coefficient

Sisecam Resources  Tronox Holdings

Pay attention - limited upside

The 3 months correlation between Sisecam and Tronox is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Sisecam Resources LP and Tronox Holdings PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tronox Holdings PLC and Sisecam Resources 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 Sisecam Resources LP are associated (or correlated) with Tronox Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tronox Holdings PLC has no effect on the direction of Sisecam Resources i.e., Sisecam Resources and Tronox Holdings go up and down completely randomly.

Pair Corralation between Sisecam Resources and Tronox Holdings

If you would invest (100.00) in Sisecam Resources LP on December 29, 2024 and sell it today you would earn a total of  100.00  from holding Sisecam Resources LP or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Sisecam Resources LP  vs.  Tronox Holdings PLC

Sisecam Resources

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sisecam Resources LP has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Sisecam Resources is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Tronox Holdings PLC

Risk-Adjusted Performance

Very Weak

Over the last 90 days Tronox Holdings PLC 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 basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Sisecam Resources and Tronox Holdings

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

The idea behind Sisecam Resources LP and Tronox Holdings PLC 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.