Correlation Between Cenergy Holdings and Sidma SA
Can any of the company-specific risk be diversified away by investing in both Cenergy Holdings and Sidma SA 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 Cenergy Holdings and Sidma SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cenergy Holdings SA and Sidma SA Steel, you can compare the effects of market volatilities on Cenergy Holdings and Sidma SA 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 Cenergy Holdings with a short position of Sidma SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cenergy Holdings and Sidma SA.
Diversification Opportunities for Cenergy Holdings and Sidma SA
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cenergy and Sidma is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Cenergy Holdings SA and Sidma SA Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sidma SA Steel and Cenergy Holdings 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 Cenergy Holdings SA are associated (or correlated) with Sidma SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sidma SA Steel has no effect on the direction of Cenergy Holdings i.e., Cenergy Holdings and Sidma SA go up and down completely randomly.
Pair Corralation between Cenergy Holdings and Sidma SA
Assuming the 90 days trading horizon Cenergy Holdings SA is expected to generate 1.06 times more return on investment than Sidma SA. However, Cenergy Holdings is 1.06 times more volatile than Sidma SA Steel. It trades about -0.02 of its potential returns per unit of risk. Sidma SA Steel is currently generating about -0.03 per unit of risk. If you would invest 939.00 in Cenergy Holdings SA on September 12, 2024 and sell it today you would lose (31.00) from holding Cenergy Holdings SA or give up 3.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.44% |
| Values | Daily Returns |
Cenergy Holdings SA vs. Sidma SA Steel
Performance |
| Timeline |
| Cenergy Holdings |
| Sidma SA Steel |
Cenergy Holdings and Sidma SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cenergy Holdings and Sidma SA
The main advantage of trading using opposite Cenergy Holdings and Sidma SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cenergy Holdings position performs unexpectedly, Sidma SA 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 Sidma SA will offset losses from the drop in Sidma SA's long position.| Cenergy Holdings vs. Interlife General Insurance | Cenergy Holdings vs. Hellenic Telecommunications Organization | Cenergy Holdings vs. Profile Systems Software | Cenergy Holdings vs. CPI Computer Peripherals |
| Sidma SA vs. Interlife General Insurance | Sidma SA vs. Technical Olympic SA | Sidma SA vs. Profile Systems Software | Sidma SA vs. Piraeus Financial Holdings |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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