Correlation Between Santierul Naval and Electromagnetica

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

By analyzing existing cross correlation between Santierul Naval Orsova and Electromagnetica SA, you can compare the effects of market volatilities on Santierul Naval and Electromagnetica 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 Santierul Naval with a short position of Electromagnetica. Check out your portfolio center. Please also check ongoing floating volatility patterns of Santierul Naval and Electromagnetica.

Diversification Opportunities for Santierul Naval and Electromagnetica

-0.06

Correlation Coefficient

Santierul Naval  Electromagnetica

Good diversification

The 3 months correlation between Santierul and Electromagnetica is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Santierul Naval Orsova and Electromagnetica SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electromagnetica and Santierul Naval 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 Santierul Naval Orsova are associated (or correlated) with Electromagnetica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Electromagnetica has no effect on the direction of Santierul Naval i.e., Santierul Naval and Electromagnetica go up and down completely randomly.

Pair Corralation between Santierul Naval and Electromagnetica

Assuming the 90 days trading horizon Santierul Naval Orsova is expected to under-perform the Electromagnetica. In addition to that, Santierul Naval is 1.05 times more volatile than Electromagnetica SA. It trades about -0.04 of its total potential returns per unit of risk. Electromagnetica SA is currently generating about 0.13 per unit of volatility. If you would invest  20.00  in Electromagnetica SA on September 27, 2024 and sell it today you would earn a total of  1.00  from holding Electromagnetica SA or generate 5.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Santierul Naval Orsova  vs.  Electromagnetica SA

Santierul Naval Orsova

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Santierul Naval Orsova are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Santierul Naval may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Electromagnetica

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Electromagnetica SA are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Electromagnetica may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Santierul Naval and Electromagnetica

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

The idea behind Santierul Naval Orsova and Electromagnetica SA 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.

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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.