Correlation Between Sidma SA and Daios Plastics
Can any of the company-specific risk be diversified away by investing in both Sidma SA and Daios Plastics 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 Daios Plastics 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 Daios Plastics SA, you can compare the effects of market volatilities on Sidma SA and Daios Plastics 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 Daios Plastics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sidma SA and Daios Plastics.
Diversification Opportunities for Sidma SA and Daios Plastics
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sidma and Daios is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Sidma SA Steel and Daios Plastics SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daios Plastics SA 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 Daios Plastics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daios Plastics SA has no effect on the direction of Sidma SA i.e., Sidma SA and Daios Plastics go up and down completely randomly.
Pair Corralation between Sidma SA and Daios Plastics
Assuming the 90 days trading horizon Sidma SA Steel is expected to under-perform the Daios Plastics. But the stock apears to be less risky and, when comparing its historical volatility, Sidma SA Steel is 1.36 times less risky than Daios Plastics. The stock trades about -0.05 of its potential returns per unit of risk. The Daios Plastics SA is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 314.00 in Daios Plastics SA on November 5, 2024 and sell it today you would earn a total of 26.00 from holding Daios Plastics SA or generate 8.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sidma SA Steel vs. Daios Plastics SA
Performance |
| Timeline |
| Sidma SA Steel |
| Daios Plastics SA |
Sidma SA and Daios Plastics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sidma SA and Daios Plastics
The main advantage of trading using opposite Sidma SA and Daios Plastics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sidma SA position performs unexpectedly, Daios Plastics 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 Daios Plastics will offset losses from the drop in Daios Plastics' long position.| Sidma SA vs. Daios Plastics SA | Sidma SA vs. Profile Systems Software | Sidma SA vs. Hellenic Telecommunications Organization | Sidma SA vs. CPI Computer Peripherals |
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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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