Correlation Between Sabien Technology and Seeing Machines
Can any of the company-specific risk be diversified away by investing in both Sabien Technology and Seeing Machines 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 Seeing Machines 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 Seeing Machines Limited, you can compare the effects of market volatilities on Sabien Technology and Seeing Machines 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 Seeing Machines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sabien Technology and Seeing Machines.
Diversification Opportunities for Sabien Technology and Seeing Machines
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sabien and Seeing is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Sabien Technology Group and Seeing Machines Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seeing Machines 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 Seeing Machines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seeing Machines has no effect on the direction of Sabien Technology i.e., Sabien Technology and Seeing Machines go up and down completely randomly.
Pair Corralation between Sabien Technology and Seeing Machines
Assuming the 90 days trading horizon Sabien Technology Group is expected to generate 1.58 times more return on investment than Seeing Machines. However, Sabien Technology is 1.58 times more volatile than Seeing Machines Limited. It trades about 0.01 of its potential returns per unit of risk. Seeing Machines Limited is currently generating about -0.05 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 Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Sabien Technology Group vs. Seeing Machines Limited
Performance |
| Timeline |
| Sabien Technology |
| Seeing Machines |
Sabien Technology and Seeing Machines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sabien Technology and Seeing Machines
The main advantage of trading using opposite Sabien Technology and Seeing Machines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sabien Technology position performs unexpectedly, Seeing Machines 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 Seeing Machines will offset losses from the drop in Seeing Machines' 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 |
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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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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