Correlation Between Sidma SA and Marfin Investment
Can any of the company-specific risk be diversified away by investing in both Sidma SA and Marfin Investment 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 Marfin Investment 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 Marfin Investment Group, you can compare the effects of market volatilities on Sidma SA and Marfin Investment 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 Marfin Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sidma SA and Marfin Investment.
Diversification Opportunities for Sidma SA and Marfin Investment
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sidma and Marfin is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Sidma SA Steel and Marfin Investment Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marfin Investment 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 Marfin Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marfin Investment has no effect on the direction of Sidma SA i.e., Sidma SA and Marfin Investment go up and down completely randomly.
Pair Corralation between Sidma SA and Marfin Investment
Assuming the 90 days trading horizon Sidma SA Steel is expected to generate 0.79 times more return on investment than Marfin Investment. However, Sidma SA Steel is 1.26 times less risky than Marfin Investment. It trades about -0.08 of its potential returns per unit of risk. Marfin Investment Group is currently generating about -0.09 per unit of risk. If you would invest 159.00 in Sidma SA Steel on November 4, 2024 and sell it today you would lose (3.00) from holding Sidma SA Steel or give up 1.89% 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. Marfin Investment Group
Performance |
| Timeline |
| Sidma SA Steel |
| Marfin Investment |
Sidma SA and Marfin Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sidma SA and Marfin Investment
The main advantage of trading using opposite Sidma SA and Marfin Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sidma SA position performs unexpectedly, Marfin Investment 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 Marfin Investment will offset losses from the drop in Marfin Investment's long position.| Sidma SA vs. Lampsa Hellenic Hotels | Sidma SA vs. Foodlink AE | Sidma SA vs. Performance Technologies SA | Sidma SA vs. Hellenic Telecommunications Organization |
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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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