Correlation Between Technical Olympic and Sidma SA
Can any of the company-specific risk be diversified away by investing in both Technical Olympic 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 Technical Olympic and Sidma SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Technical Olympic SA and Sidma SA Steel, you can compare the effects of market volatilities on Technical Olympic 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 Technical Olympic with a short position of Sidma SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Technical Olympic and Sidma SA.
Diversification Opportunities for Technical Olympic and Sidma SA
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Technical and Sidma is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Technical Olympic 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 Technical Olympic 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 Technical Olympic 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 Technical Olympic i.e., Technical Olympic and Sidma SA go up and down completely randomly.
Pair Corralation between Technical Olympic and Sidma SA
Assuming the 90 days trading horizon Technical Olympic SA is expected to generate 0.62 times more return on investment than Sidma SA. However, Technical Olympic SA is 1.61 times less risky than Sidma SA. It trades about -0.17 of its potential returns per unit of risk. Sidma SA Steel is currently generating about -0.13 per unit of risk. If you would invest 244.00 in Technical Olympic SA on August 29, 2024 and sell it today you would lose (12.00) from holding Technical Olympic SA or give up 4.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Technical Olympic SA vs. Sidma SA Steel
Performance |
| Timeline |
| Technical Olympic |
| Sidma SA Steel |
Technical Olympic and Sidma SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Technical Olympic and Sidma SA
The main advantage of trading using opposite Technical Olympic and Sidma SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Technical Olympic 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.| Technical Olympic vs. Interlife General Insurance | Technical Olympic vs. National Bank of | Technical Olympic vs. Hellenic Telecommunications Organization | Technical Olympic vs. Marfin Investment Group |
| 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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