Correlation Between Strauss and Sano Brunos

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

By analyzing existing cross correlation between Strauss Group and Sano Brunos Enterprises, you can compare the effects of market volatilities on Strauss and Sano Brunos 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 Strauss with a short position of Sano Brunos. Check out your portfolio center. Please also check ongoing floating volatility patterns of Strauss and Sano Brunos.

Diversification Opportunities for Strauss and Sano Brunos

-0.41

Correlation Coefficient

Strauss  Sano Brunos

Very good diversification

The 3 months correlation between Strauss and Sano is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Strauss Group and Sano Brunos Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sano Brunos Enterprises and Strauss 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 Strauss Group are associated (or correlated) with Sano Brunos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sano Brunos Enterprises has no effect on the direction of Strauss i.e., Strauss and Sano Brunos go up and down completely randomly.

Pair Corralation between Strauss and Sano Brunos

Assuming the 90 days trading horizon Strauss is expected to generate 5.06 times less return on investment than Sano Brunos. But when comparing it to its historical volatility, Strauss Group is 1.26 times less risky than Sano Brunos. It trades about 0.03 of its potential returns per unit of risk. Sano Brunos Enterprises is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  2,915,875  in Sano Brunos Enterprises on January 31, 2024 and sell it today you would earn a total of  259,125  from holding Sano Brunos Enterprises or generate 8.89% return on investment over 90 days.

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

Strauss Group  vs.  Sano Brunos Enterprises

Strauss Group

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Strauss Group are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Strauss is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Sano Brunos Enterprises

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sano Brunos Enterprises are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Sano Brunos unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Strauss and Sano Brunos

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

The idea behind Strauss Group and Sano Brunos Enterprises 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.