Correlation Between Semco Technologies and Novatech Industries

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

By analyzing existing cross correlation between Semco Technologies Sas and Novatech Industries SA, you can compare the effects of market volatilities on Semco Technologies and Novatech Industries 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 Semco Technologies with a short position of Novatech Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Semco Technologies and Novatech Industries.

Diversification Opportunities for Semco Technologies and Novatech Industries

0.68

Correlation Coefficient

Semco Technologies  Novatech Industries

Poor diversification

The 3 months correlation between Semco and Novatech is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Semco Technologies Sas and Novatech Industries SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Novatech Industries and Semco Technologies 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 Semco Technologies Sas are associated (or correlated) with Novatech Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Novatech Industries has no effect on the direction of Semco Technologies i.e., Semco Technologies and Novatech Industries go up and down completely randomly.

Pair Corralation between Semco Technologies and Novatech Industries

Assuming the 90 days trading horizon Semco Technologies Sas is expected to under-perform the Novatech Industries. But the stock apears to be less risky and, when comparing its historical volatility, Semco Technologies Sas is 1.3 times less risky than Novatech Industries. The stock trades about -0.23 of its potential returns per unit of risk. The Novatech Industries SA is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  1,000.00  in Novatech Industries SA on April 24, 2025 and sell it today you would earn a total of  470.00  from holding Novatech Industries SA or generate 47.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	15.87%
Values	Daily Returns

Semco Technologies Sas  vs.  Novatech Industries SA

Semco Technologies Sas

Risk-Adjusted Performance

Very Weak

Over the last 90 days Semco Technologies Sas has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in August 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Novatech Industries

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Novatech Industries SA are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Novatech Industries reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Semco Technologies and Novatech Industries

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

The idea behind Semco Technologies Sas and Novatech Industries 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.