Correlation Between EPAM Systems and SAIHEAT
Can any of the company-specific risk be diversified away by investing in both EPAM Systems and SAIHEAT 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 EPAM Systems and SAIHEAT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EPAM Systems and SAIHEAT Limited, you can compare the effects of market volatilities on EPAM Systems and SAIHEAT 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 EPAM Systems with a short position of SAIHEAT. Check out your portfolio center. Please also check ongoing floating volatility patterns of EPAM Systems and SAIHEAT.
Diversification Opportunities for EPAM Systems and SAIHEAT
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between EPAM and SAIHEAT is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding EPAM Systems and SAIHEAT Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SAIHEAT Limited and EPAM Systems 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 EPAM Systems are associated (or correlated) with SAIHEAT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SAIHEAT Limited has no effect on the direction of EPAM Systems i.e., EPAM Systems and SAIHEAT go up and down completely randomly.
Pair Corralation between EPAM Systems and SAIHEAT
Given the investment horizon of 90 days EPAM Systems is expected to generate 0.22 times more return on investment than SAIHEAT. However, EPAM Systems is 4.49 times less risky than SAIHEAT. It trades about 0.26 of its potential returns per unit of risk. SAIHEAT Limited is currently generating about 0.04 per unit of risk. If you would invest 19,795 in EPAM Systems on August 23, 2024 and sell it today you would earn a total of 4,727 from holding EPAM Systems or generate 23.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 43.48% |
| Values | Daily Returns |
EPAM Systems vs. SAIHEAT Limited
Performance |
| Timeline |
| EPAM Systems |
| SAIHEAT Limited |
EPAM Systems and SAIHEAT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EPAM Systems and SAIHEAT
The main advantage of trading using opposite EPAM Systems and SAIHEAT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EPAM Systems position performs unexpectedly, SAIHEAT 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 SAIHEAT will offset losses from the drop in SAIHEAT's long position.| EPAM Systems vs. Concentrix | EPAM Systems vs. Gartner | EPAM Systems vs. Accenture plc | EPAM Systems vs. International Business Machines |
| SAIHEAT vs. Raymond James Financial | SAIHEAT vs. Lion Financial Group | SAIHEAT vs. The Charles Schwab | SAIHEAT vs. The Charles Schwab |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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