Correlation Between Sabien Technology and Auction Technology
Can any of the company-specific risk be diversified away by investing in both Sabien Technology and Auction 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 Sabien Technology and Auction Technology 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 Auction Technology Group, you can compare the effects of market volatilities on Sabien Technology and Auction 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 Sabien Technology with a short position of Auction Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sabien Technology and Auction Technology.
Diversification Opportunities for Sabien Technology and Auction Technology
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sabien and Auction is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Sabien Technology Group and Auction Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Auction Technology 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 Auction Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Auction Technology has no effect on the direction of Sabien Technology i.e., Sabien Technology and Auction Technology go up and down completely randomly.
Pair Corralation between Sabien Technology and Auction Technology
Assuming the 90 days trading horizon Sabien Technology Group is expected to generate 1.22 times more return on investment than Auction Technology. However, Sabien Technology is 1.22 times more volatile than Auction Technology Group. It trades about 0.01 of its potential returns per unit of risk. Auction Technology Group is currently generating about -0.02 per unit of risk. If you would invest 1,175 in Sabien Technology Group on August 30, 2024 and sell it today you would lose (175.00) from holding Sabien Technology Group or give up 14.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.2% |
| Values | Daily Returns |
Sabien Technology Group vs. Auction Technology Group
Performance |
| Timeline |
| Sabien Technology |
| Auction Technology |
Sabien Technology and Auction Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sabien Technology and Auction Technology
The main advantage of trading using opposite Sabien Technology and Auction Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sabien Technology position performs unexpectedly, Auction 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 Auction Technology will offset losses from the drop in Auction Technology'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 |
| Auction Technology vs. Samsung Electronics Co | Auction Technology vs. Samsung Electronics Co | Auction Technology vs. Toyota Motor Corp | Auction Technology 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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