Correlation Between State Bank and Sabien Technology
Can any of the company-specific risk be diversified away by investing in both State Bank 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 State Bank and Sabien Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between State Bank of and Sabien Technology Group, you can compare the effects of market volatilities on State Bank 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 State Bank with a short position of Sabien Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of State Bank and Sabien Technology.
Diversification Opportunities for State Bank and Sabien Technology
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between State and Sabien is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding State Bank of and Sabien Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sabien Technology and State Bank 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 State Bank of 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 State Bank i.e., State Bank and Sabien Technology go up and down completely randomly.
Pair Corralation between State Bank and Sabien Technology
Assuming the 90 days trading horizon State Bank of is expected to generate 0.62 times more return on investment than Sabien Technology. However, State Bank of is 1.62 times less risky than Sabien Technology. It trades about -0.22 of its potential returns per unit of risk. Sabien Technology Group is currently generating about -0.32 per unit of risk. If you would invest 9,220 in State Bank of on October 29, 2024 and sell it today you would lose (630.00) from holding State Bank of or give up 6.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
State Bank of vs. Sabien Technology Group
Performance |
| Timeline |
| State Bank |
| Sabien Technology |
State Bank and Sabien Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with State Bank and Sabien Technology
The main advantage of trading using opposite State Bank and Sabien Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if State Bank 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.| State Bank vs. Gaztransport et Technigaz | State Bank vs. Pets at Home | State Bank vs. Trainline Plc | State Bank vs. Synthomer plc |
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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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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