Correlation Between Sayona Mining and Industrias Penoles

Can any of the company-specific risk be diversified away by investing in both Sayona Mining and Industrias Penoles 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 Sayona Mining and Industrias Penoles into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Sayona Mining Limited and Industrias Penoles Sab, you can compare the effects of market volatilities on Sayona Mining and Industrias Penoles 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 Sayona Mining with a short position of Industrias Penoles. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sayona Mining and Industrias Penoles.

Diversification Opportunities for Sayona Mining and Industrias Penoles

-0.44

Correlation Coefficient

Sayona Mining  Industrias Penoles

Very good diversification

The 3 months correlation between Sayona and Industrias is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Sayona Mining Limited and Industrias Penoles Sab in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Industrias Penoles Sab and Sayona Mining 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 Sayona Mining Limited are associated (or correlated) with Industrias Penoles. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Industrias Penoles Sab has no effect on the direction of Sayona Mining i.e., Sayona Mining and Industrias Penoles go up and down completely randomly.

Pair Corralation between Sayona Mining and Industrias Penoles

Assuming the 90 days horizon Sayona Mining Limited is expected to under-perform the Industrias Penoles. In addition to that, Sayona Mining is 2.09 times more volatile than Industrias Penoles Sab. It trades about -0.05 of its total potential returns per unit of risk. Industrias Penoles Sab is currently generating about 0.16 per unit of volatility. If you would invest  1,250  in Industrias Penoles Sab on December 30, 2024 and sell it today you would earn a total of  520.00  from holding Industrias Penoles Sab or generate 41.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	96.77%
Values	Daily Returns

Sayona Mining Limited  vs.  Industrias Penoles Sab

Sayona Mining Limited

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sayona Mining Limited 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 basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Industrias Penoles Sab

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Industrias Penoles Sab are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Industrias Penoles reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sayona Mining and Industrias Penoles

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

The idea behind Sayona Mining Limited and Industrias Penoles Sab 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.