Correlation Between Sabien Technology and New Residential
Can any of the company-specific risk be diversified away by investing in both Sabien Technology and New Residential 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 New Residential 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 New Residential Investment, you can compare the effects of market volatilities on Sabien Technology and New Residential 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 New Residential. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sabien Technology and New Residential.
Diversification Opportunities for Sabien Technology and New Residential
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Sabien and New is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Sabien Technology Group and New Residential Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Residential Inve 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 New Residential. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Residential Inve has no effect on the direction of Sabien Technology i.e., Sabien Technology and New Residential go up and down completely randomly.
Pair Corralation between Sabien Technology and New Residential
Assuming the 90 days trading horizon Sabien Technology Group is expected to under-perform the New Residential. In addition to that, Sabien Technology is 2.01 times more volatile than New Residential Investment. It trades about -0.39 of its total potential returns per unit of risk. New Residential Investment is currently generating about 0.27 per unit of volatility. If you would invest 1,082 in New Residential Investment on November 2, 2024 and sell it today you would earn a total of 78.00 from holding New Residential Investment or generate 7.21% 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. New Residential Investment
Performance |
| Timeline |
| Sabien Technology |
| New Residential Inve |
Sabien Technology and New Residential Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sabien Technology and New Residential
The main advantage of trading using opposite Sabien Technology and New Residential positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sabien Technology position performs unexpectedly, New Residential 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 New Residential will offset losses from the drop in New Residential's long position.| Sabien Technology vs. Bank of Ireland | Sabien Technology vs. Erste Group Bank | Sabien Technology vs. Impax Asset Management | Sabien Technology vs. Jupiter Fund Management |
| New Residential vs. Aeorema Communications Plc | New Residential vs. Charter Communications Cl | New Residential vs. Zurich Insurance Group | New Residential vs. mobilezone holding AG |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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