Correlation Between Automatic Data and Sabien Technology
Can any of the company-specific risk be diversified away by investing in both Automatic Data and Sabien Technology 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 Automatic Data and Sabien Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Automatic Data Processing and Sabien Technology Group, you can compare the effects of market volatilities on Automatic Data and Sabien Technology 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 Automatic Data with a short position of Sabien Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Automatic Data and Sabien Technology.
Diversification Opportunities for Automatic Data and Sabien Technology
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Automatic and Sabien is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Automatic Data Processing and Sabien Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sabien Technology and Automatic Data 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 Automatic Data Processing are associated (or correlated) with Sabien Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sabien Technology has no effect on the direction of Automatic Data i.e., Automatic Data and Sabien Technology go up and down completely randomly.
Pair Corralation between Automatic Data and Sabien Technology
Assuming the 90 days trading horizon Automatic Data Processing is expected to generate 0.29 times more return on investment than Sabien Technology. However, Automatic Data Processing is 3.5 times less risky than Sabien Technology. It trades about -0.03 of its potential returns per unit of risk. Sabien Technology Group is currently generating about -0.28 per unit of risk. If you would invest 29,721 in Automatic Data Processing on October 26, 2024 and sell it today you would lose (159.00) from holding Automatic Data Processing or give up 0.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Automatic Data Processing vs. Sabien Technology Group
Performance |
| Timeline |
| Automatic Data Processing |
| Sabien Technology |
Automatic Data and Sabien Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Automatic Data and Sabien Technology
The main advantage of trading using opposite Automatic Data and Sabien Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Automatic Data position performs unexpectedly, Sabien Technology 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 Sabien Technology will offset losses from the drop in Sabien Technology's long position.| Automatic Data vs. AfriTin Mining | Automatic Data vs. Applied Materials | Automatic Data vs. Bloomsbury Publishing Plc | Automatic Data vs. Griffin Mining |
| Sabien Technology vs. DXC Technology Co | Sabien Technology vs. Symphony Environmental Technologies | Sabien Technology vs. Automatic Data Processing | Sabien Technology vs. Ashtead Technology Holdings |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals |