Correlation Between Sidma SA and CPI Computer

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

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

Diversification Opportunities for Sidma SA and CPI Computer

0.46

Correlation Coefficient

Sidma SA  CPI Computer

Very weak diversification

The 3 months correlation between Sidma and CPI is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Sidma SA Steel and CPI Computer Peripherals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CPI Computer Peripherals and Sidma 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 Sidma SA Steel are associated (or correlated) with CPI Computer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CPI Computer Peripherals has no effect on the direction of Sidma SA i.e., Sidma SA and CPI Computer go up and down completely randomly.

Pair Corralation between Sidma SA and CPI Computer

Assuming the 90 days trading horizon Sidma SA is expected to generate 4.09 times less return on investment than CPI Computer. But when comparing it to its historical volatility, Sidma SA Steel is 2.01 times less risky than CPI Computer. It trades about 0.05 of its potential returns per unit of risk. CPI Computer Peripherals is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  52.00  in CPI Computer Peripherals on April 23, 2025 and sell it today you would earn a total of  10.00  from holding CPI Computer Peripherals or generate 19.23% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.41%
Values	Daily Returns

Sidma SA Steel  vs.  CPI Computer Peripherals

Sidma SA Steel

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Sidma SA Steel are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Sidma SA is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

CPI Computer Peripherals

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CPI Computer Peripherals are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain forward indicators, CPI Computer unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sidma SA and CPI Computer

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

The idea behind Sidma SA Steel and CPI Computer Peripherals 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.