Correlation Between Sabien Technology and Made Tech
Can any of the company-specific risk be diversified away by investing in both Sabien Technology and Made Tech 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 Made Tech 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 Made Tech Group, you can compare the effects of market volatilities on Sabien Technology and Made Tech 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 Made Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sabien Technology and Made Tech.
Diversification Opportunities for Sabien Technology and Made Tech
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sabien and Made is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Sabien Technology Group and Made Tech Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Made Tech Group 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 Made Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Made Tech Group has no effect on the direction of Sabien Technology i.e., Sabien Technology and Made Tech go up and down completely randomly.
Pair Corralation between Sabien Technology and Made Tech
Assuming the 90 days trading horizon Sabien Technology is expected to generate 16.77 times less return on investment than Made Tech. But when comparing it to its historical volatility, Sabien Technology Group is 1.07 times less risky than Made Tech. It trades about 0.01 of its potential returns per unit of risk. Made Tech Group is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,600 in Made Tech Group on September 1, 2024 and sell it today you would earn a total of 700.00 from holding Made Tech Group or generate 43.75% 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. Made Tech Group
Performance |
| Timeline |
| Sabien Technology |
| Made Tech Group |
Sabien Technology and Made Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sabien Technology and Made Tech
The main advantage of trading using opposite Sabien Technology and Made Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sabien Technology position performs unexpectedly, Made Tech 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 Made Tech will offset losses from the drop in Made Tech's long position.| Sabien Technology vs. Synchrony Financial | Sabien Technology vs. CleanTech Lithium plc | Sabien Technology vs. Virgin Wines UK | Sabien Technology vs. BW Offshore |
| Made Tech vs. Ironveld Plc | Made Tech vs. Aberdeen Diversified Income | Made Tech vs. Tata Steel Limited | Made Tech vs. Federal Realty Investment |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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