Correlation Between Sidma SA and Karelia Tobacco
Can any of the company-specific risk be diversified away by investing in both Sidma SA and Karelia Tobacco 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 Karelia Tobacco 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 Karelia Tobacco, you can compare the effects of market volatilities on Sidma SA and Karelia Tobacco 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 Karelia Tobacco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sidma SA and Karelia Tobacco.
Diversification Opportunities for Sidma SA and Karelia Tobacco
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sidma and Karelia is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Sidma SA Steel and Karelia Tobacco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Karelia Tobacco 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 Karelia Tobacco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Karelia Tobacco has no effect on the direction of Sidma SA i.e., Sidma SA and Karelia Tobacco go up and down completely randomly.
Pair Corralation between Sidma SA and Karelia Tobacco
Assuming the 90 days trading horizon Sidma SA Steel is expected to under-perform the Karelia Tobacco. In addition to that, Sidma SA is 1.97 times more volatile than Karelia Tobacco. It trades about -0.07 of its total potential returns per unit of risk. Karelia Tobacco is currently generating about -0.07 per unit of volatility. If you would invest 34,200 in Karelia Tobacco on August 26, 2024 and sell it today you would lose (600.00) from holding Karelia Tobacco or give up 1.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sidma SA Steel vs. Karelia Tobacco
Performance |
| Timeline |
| Sidma SA Steel |
| Karelia Tobacco |
Sidma SA and Karelia Tobacco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sidma SA and Karelia Tobacco
The main advantage of trading using opposite Sidma SA and Karelia Tobacco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sidma SA position performs unexpectedly, Karelia Tobacco 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 Karelia Tobacco will offset losses from the drop in Karelia Tobacco'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 |
| Karelia Tobacco vs. Greek Organization of | Karelia Tobacco vs. Jumbo SA | Karelia Tobacco vs. Mytilineos SA | Karelia Tobacco vs. Motor Oil Corinth |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. |