Correlation Between Sabien Technology and Hershey
Can any of the company-specific risk be diversified away by investing in both Sabien Technology and Hershey 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 Hershey 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 Hershey Co, you can compare the effects of market volatilities on Sabien Technology and Hershey 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 Hershey. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sabien Technology and Hershey.
Diversification Opportunities for Sabien Technology and Hershey
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sabien and Hershey is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Sabien Technology Group and Hershey Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hershey 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 Hershey. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hershey has no effect on the direction of Sabien Technology i.e., Sabien Technology and Hershey go up and down completely randomly.
Pair Corralation between Sabien Technology and Hershey
Assuming the 90 days trading horizon Sabien Technology Group is expected to under-perform the Hershey. In addition to that, Sabien Technology is 1.78 times more volatile than Hershey Co. It trades about -0.28 of its total potential returns per unit of risk. Hershey Co is currently generating about -0.31 per unit of volatility. If you would invest 16,834 in Hershey Co on October 22, 2024 and sell it today you would lose (1,434) from holding Hershey Co or give up 8.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sabien Technology Group vs. Hershey Co
Performance |
| Timeline |
| Sabien Technology |
| Hershey |
Sabien Technology and Hershey Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sabien Technology and Hershey
The main advantage of trading using opposite Sabien Technology and Hershey positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sabien Technology position performs unexpectedly, Hershey 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 Hershey will offset losses from the drop in Hershey's long position.| Sabien Technology vs. Tungsten West PLC | Sabien Technology vs. Gfinity PLC | Sabien Technology vs. Argo Group Limited | Sabien Technology vs. Versarien PLC |
| Hershey vs. Solstad Offshore ASA | Hershey vs. Dairy Farm International | Hershey vs. Primorus Investments plc | Hershey vs. FC Investment Trust |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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