Correlation Between Sabien Technology and International Biotechnology
Can any of the company-specific risk be diversified away by investing in both Sabien Technology and International Biotechnology 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 International Biotechnology 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 International Biotechnology Trust, you can compare the effects of market volatilities on Sabien Technology and International Biotechnology 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 International Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sabien Technology and International Biotechnology.
Diversification Opportunities for Sabien Technology and International Biotechnology
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Sabien and International is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Sabien Technology Group and International Biotechnology Tr in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Biotechnology 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 International Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Biotechnology has no effect on the direction of Sabien Technology i.e., Sabien Technology and International Biotechnology go up and down completely randomly.
Pair Corralation between Sabien Technology and International Biotechnology
Assuming the 90 days trading horizon Sabien Technology Group is expected to generate 3.13 times more return on investment than International Biotechnology. However, Sabien Technology is 3.13 times more volatile than International Biotechnology Trust. It trades about 0.09 of its potential returns per unit of risk. International Biotechnology Trust is currently generating about 0.02 per unit of risk. If you would invest 850.00 in Sabien Technology Group on August 25, 2024 and sell it today you would earn a total of 125.00 from holding Sabien Technology Group or generate 14.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sabien Technology Group vs. International Biotechnology Tr
Performance |
| Timeline |
| Sabien Technology |
| International Biotechnology |
Sabien Technology and International Biotechnology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sabien Technology and International Biotechnology
The main advantage of trading using opposite Sabien Technology and International Biotechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sabien Technology position performs unexpectedly, International Biotechnology 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 International Biotechnology will offset losses from the drop in International Biotechnology's long position.| Sabien Technology vs. Catalyst Media Group | Sabien Technology vs. CATLIN GROUP | Sabien Technology vs. Tamburi Investment Partners | Sabien Technology vs. Magnora ASA |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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