Correlation Between Sabien Technology and GoldMining
Can any of the company-specific risk be diversified away by investing in both Sabien Technology and GoldMining 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 GoldMining 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 GoldMining, you can compare the effects of market volatilities on Sabien Technology and GoldMining 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 GoldMining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sabien Technology and GoldMining.
Diversification Opportunities for Sabien Technology and GoldMining
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sabien and GoldMining is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Sabien Technology Group and GoldMining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GoldMining 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 GoldMining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GoldMining has no effect on the direction of Sabien Technology i.e., Sabien Technology and GoldMining go up and down completely randomly.
Pair Corralation between Sabien Technology and GoldMining
Assuming the 90 days trading horizon Sabien Technology Group is expected to under-perform the GoldMining. But the stock apears to be less risky and, when comparing its historical volatility, Sabien Technology Group is 1.21 times less risky than GoldMining. The stock trades about -0.16 of its potential returns per unit of risk. The GoldMining is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 126.00 in GoldMining on August 29, 2024 and sell it today you would lose (7.00) from holding GoldMining or give up 5.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 66.67% |
| Values | Daily Returns |
Sabien Technology Group vs. GoldMining
Performance |
| Timeline |
| Sabien Technology |
| GoldMining |
Sabien Technology and GoldMining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sabien Technology and GoldMining
The main advantage of trading using opposite Sabien Technology and GoldMining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sabien Technology position performs unexpectedly, GoldMining 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 GoldMining will offset losses from the drop in GoldMining's long position.| Sabien Technology vs. Samsung Electronics Co | Sabien Technology vs. Samsung Electronics Co | Sabien Technology vs. Toyota Motor Corp | Sabien Technology vs. Reliance Industries Ltd |
| GoldMining vs. Lendinvest PLC | GoldMining vs. Neometals | GoldMining vs. Coor Service Management | GoldMining vs. Albion Technology General |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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