Correlation Between Samse SA and Parrot

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

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

Diversification Opportunities for Samse SA and Parrot

0.86

Correlation Coefficient

Samse SA  Parrot

Very poor diversification

The 3 months correlation between Samse and Parrot is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Samse SA and Parrot in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Parrot and Samse 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 Samse SA are associated (or correlated) with Parrot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Parrot has no effect on the direction of Samse SA i.e., Samse SA and Parrot go up and down completely randomly.

Pair Corralation between Samse SA and Parrot

Assuming the 90 days trading horizon Samse SA is expected to generate 3.87 times less return on investment than Parrot. But when comparing it to its historical volatility, Samse SA is 5.11 times less risky than Parrot. It trades about 0.27 of its potential returns per unit of risk. Parrot is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  700.00  in Parrot on April 20, 2025 and sell it today you would earn a total of  620.00  from holding Parrot or generate 88.57% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.44%
Values	Daily Returns

Samse SA  vs.  Parrot

Samse SA

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Samse SA are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Samse SA sustained solid returns over the last few months and may actually be approaching a breakup point.

Parrot

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Parrot are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Parrot reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Samse SA and Parrot

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

The idea behind Samse SA and Parrot 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.