Correlation Between Safetech Innovations and Mecanica Fina
Can any of the company-specific risk be diversified away by investing in both Safetech Innovations and Mecanica Fina 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 Safetech Innovations and Mecanica Fina into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Safetech Innovations SA and Mecanica Fina SA, you can compare the effects of market volatilities on Safetech Innovations and Mecanica Fina 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 Safetech Innovations with a short position of Mecanica Fina. Check out your portfolio center. Please also check ongoing floating volatility patterns of Safetech Innovations and Mecanica Fina.
Diversification Opportunities for Safetech Innovations and Mecanica Fina
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Safetech and Mecanica is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Safetech Innovations SA and Mecanica Fina SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mecanica Fina SA and Safetech Innovations 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 Safetech Innovations SA are associated (or correlated) with Mecanica Fina. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mecanica Fina SA has no effect on the direction of Safetech Innovations i.e., Safetech Innovations and Mecanica Fina go up and down completely randomly.
Pair Corralation between Safetech Innovations and Mecanica Fina
Assuming the 90 days trading horizon Safetech Innovations SA is expected to generate 0.31 times more return on investment than Mecanica Fina. However, Safetech Innovations SA is 3.19 times less risky than Mecanica Fina. It trades about 0.05 of its potential returns per unit of risk. Mecanica Fina SA is currently generating about -0.01 per unit of risk. If you would invest 94.00 in Safetech Innovations SA on October 24, 2024 and sell it today you would earn a total of 1.00 from holding Safetech Innovations SA or generate 1.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Safetech Innovations SA vs. Mecanica Fina SA
Performance |
| Timeline |
| Safetech Innovations |
| Mecanica Fina SA |
Safetech Innovations and Mecanica Fina Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Safetech Innovations and Mecanica Fina
The main advantage of trading using opposite Safetech Innovations and Mecanica Fina positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Safetech Innovations position performs unexpectedly, Mecanica Fina 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 Mecanica Fina will offset losses from the drop in Mecanica Fina's long position.| Safetech Innovations vs. Digi Communications NV | Safetech Innovations vs. Infinity Capital Investments | Safetech Innovations vs. AROBS TRANSILVANIA SOFTWARE | Safetech Innovations vs. IM Vinaria Purcari |
| Mecanica Fina vs. Compania Hoteliera InterContinental | Mecanica Fina vs. TRANSILVANIA INVESTMENTS ALLIANCE | Mecanica Fina vs. Safetech Innovations SA | Mecanica Fina vs. Infinity Capital Investments |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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