Correlation Between Stevia Corp and SLC Agricola

Can any of the company-specific risk be diversified away by investing in both Stevia Corp and SLC Agricola 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 Stevia Corp and SLC Agricola into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Stevia Corp and SLC Agricola

0.03

Correlation Coefficient

Stevia Corp  SLC Agricola

Significant diversification

The 3 months correlation between Stevia and SLC is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Stevia Corp and SLC Agricola SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SLC Agricola SA and Stevia Corp 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 Stevia Corp are associated (or correlated) with SLC Agricola. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SLC Agricola SA has no effect on the direction of Stevia Corp i.e., Stevia Corp and SLC Agricola go up and down completely randomly.

Pair Corralation between Stevia Corp and SLC Agricola

Given the investment horizon of 90 days Stevia Corp is expected to generate 6.14 times more return on investment than SLC Agricola. However, Stevia Corp is 6.14 times more volatile than SLC Agricola SA. It trades about 0.09 of its potential returns per unit of risk. SLC Agricola SA is currently generating about -0.07 per unit of risk. If you would invest  0.26  in Stevia Corp on October 5, 2024 and sell it today you would earn a total of  0.02  from holding Stevia Corp or generate 7.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

Stevia Corp  vs.  SLC Agricola SA

Stevia Corp

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Stevia Corp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak technical and fundamental indicators, Stevia Corp showed solid returns over the last few months and may actually be approaching a breakup point.

SLC Agricola SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SLC Agricola SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's forward-looking indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Stevia Corp and SLC Agricola

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

The idea behind Stevia Corp and SLC Agricola 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.