Correlation Between Sidma SA and CPI Computer
Can any of the company-specific risk be diversified away by investing in both Sidma SA and CPI Computer 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 Sidma SA and CPI Computer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sidma SA Steel and CPI Computer Peripherals, you can compare the effects of market volatilities on Sidma SA and CPI Computer 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 Sidma SA with a short position of CPI Computer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sidma SA and CPI Computer.
Diversification Opportunities for Sidma SA and CPI Computer
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sidma and CPI is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Sidma SA Steel and CPI Computer Peripherals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CPI Computer Peripherals and Sidma SA 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 Sidma SA Steel are associated (or correlated) with CPI Computer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CPI Computer Peripherals has no effect on the direction of Sidma SA i.e., Sidma SA and CPI Computer go up and down completely randomly.
Pair Corralation between Sidma SA and CPI Computer
Assuming the 90 days trading horizon Sidma SA Steel is expected to generate 1.01 times more return on investment than CPI Computer. However, Sidma SA is 1.01 times more volatile than CPI Computer Peripherals. It trades about -0.07 of its potential returns per unit of risk. CPI Computer Peripherals is currently generating about -0.15 per unit of risk. If you would invest 159.00 in Sidma SA Steel on August 26, 2024 and sell it today you would lose (6.00) from holding Sidma SA Steel or give up 3.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sidma SA Steel vs. CPI Computer Peripherals
Performance |
| Timeline |
| Sidma SA Steel |
| CPI Computer Peripherals |
Sidma SA and CPI Computer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sidma SA and CPI Computer
The main advantage of trading using opposite Sidma SA and CPI Computer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sidma SA position performs unexpectedly, CPI Computer 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 CPI Computer will offset losses from the drop in CPI Computer's long position.| Sidma SA vs. National Bank of | Sidma SA vs. EL D Mouzakis | Sidma SA vs. Lampsa Hellenic Hotels | Sidma SA vs. Eurobank Ergasias Services |
| CPI Computer vs. Performance Technologies SA | CPI Computer vs. National Bank of | CPI Computer vs. EL D Mouzakis | CPI Computer vs. Lampsa Hellenic Hotels |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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