Correlation Between Sidma SA and Nafpaktos Textile
Can any of the company-specific risk be diversified away by investing in both Sidma SA and Nafpaktos Textile 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 Nafpaktos Textile 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 Nafpaktos Textile Industry, you can compare the effects of market volatilities on Sidma SA and Nafpaktos Textile 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 Nafpaktos Textile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sidma SA and Nafpaktos Textile.
Diversification Opportunities for Sidma SA and Nafpaktos Textile
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sidma and Nafpaktos is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Sidma SA Steel and Nafpaktos Textile Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nafpaktos Textile 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 Nafpaktos Textile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nafpaktos Textile has no effect on the direction of Sidma SA i.e., Sidma SA and Nafpaktos Textile go up and down completely randomly.
Pair Corralation between Sidma SA and Nafpaktos Textile
Assuming the 90 days trading horizon Sidma SA Steel is expected to under-perform the Nafpaktos Textile. But the stock apears to be less risky and, when comparing its historical volatility, Sidma SA Steel is 1.39 times less risky than Nafpaktos Textile. The stock trades about -0.06 of its potential returns per unit of risk. The Nafpaktos Textile Industry is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 98.00 in Nafpaktos Textile Industry on October 14, 2024 and sell it today you would lose (17.00) from holding Nafpaktos Textile Industry or give up 17.35% 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. Nafpaktos Textile Industry
Performance |
| Timeline |
| Sidma SA Steel |
| Nafpaktos Textile |
Sidma SA and Nafpaktos Textile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sidma SA and Nafpaktos Textile
The main advantage of trading using opposite Sidma SA and Nafpaktos Textile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sidma SA position performs unexpectedly, Nafpaktos Textile 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 Nafpaktos Textile will offset losses from the drop in Nafpaktos Textile's long position.| Sidma SA vs. Thrace Plastics Holding | Sidma SA vs. Marfin Investment Group | Sidma SA vs. CPI Computer Peripherals | Sidma SA vs. Optronics Technologies SA |
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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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