Correlation Between Auction Technology and Sabien Technology
Can any of the company-specific risk be diversified away by investing in both Auction Technology 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 Auction Technology and Sabien Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Auction Technology Group and Sabien Technology Group, you can compare the effects of market volatilities on Auction Technology 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 Auction Technology with a short position of Sabien Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Auction Technology and Sabien Technology.
Diversification Opportunities for Auction Technology and Sabien Technology
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Auction and Sabien is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Auction Technology Group and Sabien Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sabien Technology and Auction Technology 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 Auction Technology Group 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 Auction Technology i.e., Auction Technology and Sabien Technology go up and down completely randomly.
Pair Corralation between Auction Technology and Sabien Technology
Assuming the 90 days trading horizon Auction Technology Group is expected to generate 0.87 times more return on investment than Sabien Technology. However, Auction Technology Group is 1.14 times less risky than Sabien Technology. It trades about 0.23 of its potential returns per unit of risk. Sabien Technology Group is currently generating about -0.34 per unit of risk. If you would invest 55,700 in Auction Technology Group on November 4, 2024 and sell it today you would earn a total of 6,100 from holding Auction Technology Group or generate 10.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Auction Technology Group vs. Sabien Technology Group
Performance |
| Timeline |
| Auction Technology |
| Sabien Technology |
Auction Technology and Sabien Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Auction Technology and Sabien Technology
The main advantage of trading using opposite Auction Technology and Sabien Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Auction Technology 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.| Auction Technology vs. Fulcrum Metals PLC | Auction Technology vs. Ebro Foods | Auction Technology vs. Coeur Mining | Auction Technology vs. Zoom Video Communications |
| Sabien Technology vs. SM Energy Co | Sabien Technology vs. FuelCell Energy | Sabien Technology vs. Grand Vision Media | Sabien Technology vs. Overstock |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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