Correlation Between Profile Systems and Sidma SA

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

By analyzing existing cross correlation between Profile Systems Software and Sidma SA Steel, you can compare the effects of market volatilities on Profile Systems and Sidma SA 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 Profile Systems with a short position of Sidma SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Profile Systems and Sidma SA.

Diversification Opportunities for Profile Systems and Sidma SA

0.27

Correlation Coefficient

Profile Systems  Sidma SA

Modest diversification

The 3 months correlation between Profile and Sidma is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Profile Systems Software and Sidma SA Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sidma SA Steel and Profile Systems 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 Profile Systems Software are associated (or correlated) with Sidma SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sidma SA Steel has no effect on the direction of Profile Systems i.e., Profile Systems and Sidma SA go up and down completely randomly.

Pair Corralation between Profile Systems and Sidma SA

Assuming the 90 days trading horizon Profile Systems Software is expected to generate 0.78 times more return on investment than Sidma SA. However, Profile Systems Software is 1.28 times less risky than Sidma SA. It trades about 0.36 of its potential returns per unit of risk. Sidma SA Steel is currently generating about 0.08 per unit of risk. If you would invest  545.00  in Profile Systems Software on April 25, 2025 and sell it today you would earn a total of  213.00  from holding Profile Systems Software or generate 39.08% return on investment over 90 days.

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

Profile Systems Software  vs.  Sidma SA Steel

Profile Systems Software

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Profile Systems Software are ranked lower than 28 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Profile Systems unveiled solid returns over the last few months and may actually be approaching a breakup point.

Sidma SA Steel

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sidma SA Steel are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Sidma SA may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Profile Systems and Sidma SA

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

The idea behind Profile Systems Software and Sidma SA Steel 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.