Correlation Between Science Applications and SAF Holland
Can any of the company-specific risk be diversified away by investing in both Science Applications and SAF Holland 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 Science Applications and SAF Holland into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Science Applications International and SAF Holland SA, you can compare the effects of market volatilities on Science Applications and SAF Holland 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 Science Applications with a short position of SAF Holland. Check out your portfolio center. Please also check ongoing floating volatility patterns of Science Applications and SAF Holland.
Diversification Opportunities for Science Applications and SAF Holland
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Science and SAF is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Science Applications Internati and SAF Holland SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SAF Holland SA and Science Applications 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 Science Applications International are associated (or correlated) with SAF Holland. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SAF Holland SA has no effect on the direction of Science Applications i.e., Science Applications and SAF Holland go up and down completely randomly.
Pair Corralation between Science Applications and SAF Holland
Assuming the 90 days trading horizon Science Applications International is expected to under-perform the SAF Holland. In addition to that, Science Applications is 1.95 times more volatile than SAF Holland SA. It trades about -0.29 of its total potential returns per unit of risk. SAF Holland SA is currently generating about 0.18 per unit of volatility. If you would invest 1,366 in SAF Holland SA on September 13, 2024 and sell it today you would earn a total of 114.00 from holding SAF Holland SA or generate 8.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Science Applications Internati vs. SAF Holland SA
Performance |
| Timeline |
| Science Applications |
| SAF Holland SA |
Science Applications and SAF Holland Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Science Applications and SAF Holland
The main advantage of trading using opposite Science Applications and SAF Holland positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Science Applications position performs unexpectedly, SAF Holland 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 SAF Holland will offset losses from the drop in SAF Holland's long position.| Science Applications vs. Apple Inc | Science Applications vs. Apple Inc | Science Applications vs. Apple Inc | Science Applications vs. Apple Inc |
| SAF Holland vs. Apple Inc | SAF Holland vs. Apple Inc | SAF Holland vs. Apple Inc | SAF Holland vs. Apple Inc |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |