Correlation Between S N and TRANSILVANIA LEASING

Can any of the company-specific risk be diversified away by investing in both S N and TRANSILVANIA LEASING 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 S N and TRANSILVANIA LEASING into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between S N Nuclearele and TRANSILVANIA LEASING SI, you can compare the effects of market volatilities on S N and TRANSILVANIA LEASING 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 S N with a short position of TRANSILVANIA LEASING. Check out your portfolio center. Please also check ongoing floating volatility patterns of S N and TRANSILVANIA LEASING.

Diversification Opportunities for S N and TRANSILVANIA LEASING

0.26

Correlation Coefficient

S N  TRANSILVANIA LEASING

Modest diversification

The 3 months correlation between SNN and TRANSILVANIA is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding S N Nuclearele and TRANSILVANIA LEASING SI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TRANSILVANIA LEASING and S N 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 S N Nuclearele are associated (or correlated) with TRANSILVANIA LEASING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TRANSILVANIA LEASING has no effect on the direction of S N i.e., S N and TRANSILVANIA LEASING go up and down completely randomly.

Pair Corralation between S N and TRANSILVANIA LEASING

Assuming the 90 days trading horizon S N Nuclearele is expected to generate 0.57 times more return on investment than TRANSILVANIA LEASING. However, S N Nuclearele is 1.76 times less risky than TRANSILVANIA LEASING. It trades about 0.0 of its potential returns per unit of risk. TRANSILVANIA LEASING SI is currently generating about -0.04 per unit of risk. If you would invest  4,280  in S N Nuclearele on September 12, 2024 and sell it today you would lose (30.00) from holding S N Nuclearele or give up 0.7% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

S N Nuclearele  vs.  TRANSILVANIA LEASING SI

S N Nuclearele

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days S N Nuclearele has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, S N is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

TRANSILVANIA LEASING

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TRANSILVANIA LEASING SI has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with S N and TRANSILVANIA LEASING

The main advantage of trading using opposite S N and TRANSILVANIA LEASING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if S N position performs unexpectedly, TRANSILVANIA LEASING 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 TRANSILVANIA LEASING will offset losses from the drop in TRANSILVANIA LEASING's long position.

The idea behind S N Nuclearele and TRANSILVANIA LEASING SI pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 CEOs Directory module to screen CEOs from public companies around the world.