Correlation Between Sabien Technology and Capital Drilling
Can any of the company-specific risk be diversified away by investing in both Sabien Technology and Capital Drilling 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 Capital Drilling 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 Capital Drilling, you can compare the effects of market volatilities on Sabien Technology and Capital Drilling 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 Capital Drilling. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sabien Technology and Capital Drilling.
Diversification Opportunities for Sabien Technology and Capital Drilling
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sabien and Capital is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Sabien Technology Group and Capital Drilling in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital Drilling 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 Capital Drilling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital Drilling has no effect on the direction of Sabien Technology i.e., Sabien Technology and Capital Drilling go up and down completely randomly.
Pair Corralation between Sabien Technology and Capital Drilling
Assuming the 90 days trading horizon Sabien Technology Group is expected to generate 2.85 times more return on investment than Capital Drilling. However, Sabien Technology is 2.85 times more volatile than Capital Drilling. It trades about 0.16 of its potential returns per unit of risk. Capital Drilling is currently generating about -0.05 per unit of risk. If you would invest 1,100 in Sabien Technology Group on October 11, 2024 and sell it today you would earn a total of 175.00 from holding Sabien Technology Group or generate 15.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sabien Technology Group vs. Capital Drilling
Performance |
| Timeline |
| Sabien Technology |
| Capital Drilling |
Sabien Technology and Capital Drilling Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sabien Technology and Capital Drilling
The main advantage of trading using opposite Sabien Technology and Capital Drilling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sabien Technology position performs unexpectedly, Capital Drilling 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 Capital Drilling will offset losses from the drop in Capital Drilling's long position.| Sabien Technology vs. Metro Bank PLC | Sabien Technology vs. Sparebanken Vest | Sabien Technology vs. Ameriprise Financial | Sabien Technology vs. FinecoBank SpA |
| Capital Drilling vs. Tatton Asset Management | Capital Drilling vs. MoneysupermarketCom Group PLC | Capital Drilling vs. Tyson Foods Cl | Capital Drilling vs. Trainline Plc |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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