Correlation Between EL D and Sidma SA
Can any of the company-specific risk be diversified away by investing in both EL D 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 EL D and Sidma SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EL D Mouzakis and Sidma SA Steel, you can compare the effects of market volatilities on EL D 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 EL D with a short position of Sidma SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of EL D and Sidma SA.
Diversification Opportunities for EL D and Sidma SA
Good diversification
The 3 months correlation between MOYZK and Sidma is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding EL D Mouzakis 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 EL D 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 EL D Mouzakis 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 EL D i.e., EL D and Sidma SA go up and down completely randomly.
Pair Corralation between EL D and Sidma SA
Assuming the 90 days trading horizon EL D Mouzakis is expected to under-perform the Sidma SA. But the stock apears to be less risky and, when comparing its historical volatility, EL D Mouzakis is 1.07 times less risky than Sidma SA. The stock trades about -0.16 of its potential returns per unit of risk. The Sidma SA Steel is currently generating about -0.13 of returns per unit of risk over similar time horizon. If you would invest 164.00 in Sidma SA Steel on August 28, 2024 and sell it today you would lose (10.00) from holding Sidma SA Steel or give up 6.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
EL D Mouzakis vs. Sidma SA Steel
Performance |
| Timeline |
| EL D Mouzakis |
| Sidma SA Steel |
EL D and Sidma SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EL D and Sidma SA
The main advantage of trading using opposite EL D and Sidma SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EL D 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.| EL D vs. General Commercial Industrial | EL D vs. Logismos Information Systems | EL D vs. Technical Olympic SA | EL D vs. Optronics Technologies SA |
| Sidma SA vs. National Bank of | Sidma SA vs. EL D Mouzakis | Sidma SA vs. Lampsa Hellenic Hotels | Sidma SA vs. Eurobank Ergasias Services |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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