Correlation Between Aperam SA and Grupo Empresarial

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

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

Diversification Opportunities for Aperam SA and Grupo Empresarial

-0.6

Correlation Coefficient

Aperam SA  Grupo Empresarial

Excellent diversification

The 3 months correlation between Aperam and Grupo is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Aperam SA and Grupo Empresarial San in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Empresarial San and Aperam 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 Aperam SA are associated (or correlated) with Grupo Empresarial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Empresarial San has no effect on the direction of Aperam SA i.e., Aperam SA and Grupo Empresarial go up and down completely randomly.

Pair Corralation between Aperam SA and Grupo Empresarial

Assuming the 90 days trading horizon Aperam SA is expected to under-perform the Grupo Empresarial. In addition to that, Aperam SA is 1.12 times more volatile than Grupo Empresarial San. It trades about -0.06 of its total potential returns per unit of risk. Grupo Empresarial San is currently generating about 0.2 per unit of volatility. If you would invest  389.00  in Grupo Empresarial San on March 15, 2024 and sell it today you would earn a total of  83.00  from holding Grupo Empresarial San or generate 21.34% return on investment over 90 days.

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

Aperam SA  vs.  Grupo Empresarial San

Aperam SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aperam SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Grupo Empresarial San

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Grupo Empresarial San are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady forward-looking indicators, Grupo Empresarial exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aperam SA and Grupo Empresarial

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

The idea behind Aperam SA and Grupo Empresarial San 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.