Correlation Between Sabien Technology and Automatic Data
Can any of the company-specific risk be diversified away by investing in both Sabien Technology and Automatic Data 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 Sabien Technology and Automatic Data into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sabien Technology Group and Automatic Data Processing, you can compare the effects of market volatilities on Sabien Technology and Automatic Data 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 Sabien Technology with a short position of Automatic Data. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sabien Technology and Automatic Data.
Diversification Opportunities for Sabien Technology and Automatic Data
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Sabien and Automatic is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Sabien Technology Group and Automatic Data Processing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Automatic Data Processing and Sabien 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 Sabien Technology Group are associated (or correlated) with Automatic Data. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Automatic Data Processing has no effect on the direction of Sabien Technology i.e., Sabien Technology and Automatic Data go up and down completely randomly.
Pair Corralation between Sabien Technology and Automatic Data
Assuming the 90 days trading horizon Sabien Technology Group is expected to generate 3.3 times more return on investment than Automatic Data. However, Sabien Technology is 3.3 times more volatile than Automatic Data Processing. It trades about 0.17 of its potential returns per unit of risk. Automatic Data Processing is currently generating about -0.11 per unit of risk. If you would invest 975.00 in Sabien Technology Group on September 13, 2024 and sell it today you would earn a total of 125.00 from holding Sabien Technology Group or generate 12.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sabien Technology Group vs. Automatic Data Processing
Performance |
| Timeline |
| Sabien Technology |
| Automatic Data Processing |
Sabien Technology and Automatic Data Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sabien Technology and Automatic Data
The main advantage of trading using opposite Sabien Technology and Automatic Data positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sabien Technology position performs unexpectedly, Automatic Data 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 Automatic Data will offset losses from the drop in Automatic Data's long position.| Sabien Technology vs. GreenX Metals | Sabien Technology vs. Ocean Harvest Technology | Sabien Technology vs. Vitec Software Group | Sabien Technology vs. Wheaton Precious Metals |
| Automatic Data vs. Samsung Electronics Co | Automatic Data vs. Samsung Electronics Co | Automatic Data vs. Hyundai Motor | Automatic Data vs. Reliance Industries Ltd |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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