Correlation Between Sabio Holdings and Arena Group
Can any of the company-specific risk be diversified away by investing in both Sabio Holdings and Arena Group 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 Sabio Holdings and Arena Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sabio Holdings and Arena Group Holdings, you can compare the effects of market volatilities on Sabio Holdings and Arena Group 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 Sabio Holdings with a short position of Arena Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sabio Holdings and Arena Group.
Diversification Opportunities for Sabio Holdings and Arena Group
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Sabio and Arena is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Sabio Holdings and Arena Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arena Group Holdings and Sabio Holdings 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 Sabio Holdings are associated (or correlated) with Arena Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arena Group Holdings has no effect on the direction of Sabio Holdings i.e., Sabio Holdings and Arena Group go up and down completely randomly.
Pair Corralation between Sabio Holdings and Arena Group
Assuming the 90 days horizon Sabio Holdings is expected to generate 3.34 times less return on investment than Arena Group. But when comparing it to its historical volatility, Sabio Holdings is 3.99 times less risky than Arena Group. It trades about 0.11 of its potential returns per unit of risk. Arena Group Holdings is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 91.00 in Arena Group Holdings on August 31, 2024 and sell it today you would earn a total of 61.00 from holding Arena Group Holdings or generate 67.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sabio Holdings vs. Arena Group Holdings
Performance |
| Timeline |
| Sabio Holdings |
| Arena Group Holdings |
Sabio Holdings and Arena Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sabio Holdings and Arena Group
The main advantage of trading using opposite Sabio Holdings and Arena Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sabio Holdings position performs unexpectedly, Arena Group 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 Arena Group will offset losses from the drop in Arena Group's long position.| Sabio Holdings vs. Tinybeans Group Limited | Sabio Holdings vs. DGTL Holdings | Sabio Holdings vs. Zoomd Technologies | Sabio Holdings vs. Quizam Media |
| Arena Group vs. Cerberus Cyber Sentinel | Arena Group vs. Alta Equipment Group | Arena Group vs. AN2 Therapeutics | Arena Group vs. KORE Group 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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