Correlation Between Intertech and Sidma SA
Can any of the company-specific risk be diversified away by investing in both Intertech 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 Intertech and Sidma SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intertech SA Inter and Sidma SA Steel, you can compare the effects of market volatilities on Intertech 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 Intertech with a short position of Sidma SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intertech and Sidma SA.
Diversification Opportunities for Intertech and Sidma SA
Poor diversification
The 3 months correlation between Intertech and Sidma is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Intertech SA Inter 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 Intertech 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 Intertech SA Inter 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 Intertech i.e., Intertech and Sidma SA go up and down completely randomly.
Pair Corralation between Intertech and Sidma SA
Assuming the 90 days trading horizon Intertech SA Inter is expected to generate 1.12 times more return on investment than Sidma SA. However, Intertech is 1.12 times more volatile than Sidma SA Steel. It trades about -0.03 of its potential returns per unit of risk. Sidma SA Steel is currently generating about -0.06 per unit of risk. If you would invest 118.00 in Intertech SA Inter on September 3, 2024 and sell it today you would lose (13.00) from holding Intertech SA Inter or give up 11.02% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intertech SA Inter vs. Sidma SA Steel
Performance |
| Timeline |
| Intertech SA Inter |
| Sidma SA Steel |
Intertech and Sidma SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intertech and Sidma SA
The main advantage of trading using opposite Intertech and Sidma SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intertech 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.| Intertech vs. Unibios Holdings SA | Intertech vs. Intracom Holdings SA | Intertech vs. Ideal Group SA | Intertech vs. Public Power |
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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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