Correlation Between Sabien Technology and PPHE Hotel
Can any of the company-specific risk be diversified away by investing in both Sabien Technology and PPHE Hotel 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 PPHE Hotel 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 PPHE Hotel Group, you can compare the effects of market volatilities on Sabien Technology and PPHE Hotel 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 PPHE Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sabien Technology and PPHE Hotel.
Diversification Opportunities for Sabien Technology and PPHE Hotel
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sabien and PPHE is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Sabien Technology Group and PPHE Hotel Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PPHE Hotel 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 PPHE Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PPHE Hotel Group has no effect on the direction of Sabien Technology i.e., Sabien Technology and PPHE Hotel go up and down completely randomly.
Pair Corralation between Sabien Technology and PPHE Hotel
Assuming the 90 days trading horizon Sabien Technology Group is expected to generate 2.46 times more return on investment than PPHE Hotel. However, Sabien Technology is 2.46 times more volatile than PPHE Hotel Group. It trades about 0.01 of its potential returns per unit of risk. PPHE Hotel Group is currently generating about 0.01 per unit of risk. If you would invest 1,225 in Sabien Technology Group on October 13, 2024 and sell it today you would lose (75.00) from holding Sabien Technology Group or give up 6.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sabien Technology Group vs. PPHE Hotel Group
Performance |
| Timeline |
| Sabien Technology |
| PPHE Hotel Group |
Sabien Technology and PPHE Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sabien Technology and PPHE Hotel
The main advantage of trading using opposite Sabien Technology and PPHE Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sabien Technology position performs unexpectedly, PPHE Hotel 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 PPHE Hotel will offset losses from the drop in PPHE Hotel's long position.| Sabien Technology vs. Thor Mining PLC | Sabien Technology vs. United Airlines Holdings | Sabien Technology vs. Southwest Airlines Co | Sabien Technology vs. Blackrock World Mining |
| PPHE Hotel vs. Oxford Technology 2 | PPHE Hotel vs. Pfeiffer Vacuum Technology | PPHE Hotel vs. Sabien Technology Group | PPHE Hotel vs. alstria office REIT AG |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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