Correlation Between Sapiens International and Getty Images
Can any of the company-specific risk be diversified away by investing in both Sapiens International and Getty Images 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 Sapiens International and Getty Images into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sapiens International and Getty Images Holdings, you can compare the effects of market volatilities on Sapiens International and Getty Images 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 Sapiens International with a short position of Getty Images. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sapiens International and Getty Images.
Diversification Opportunities for Sapiens International and Getty Images
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sapiens and Getty is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Sapiens International and Getty Images Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Getty Images Holdings and Sapiens International 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 Sapiens International are associated (or correlated) with Getty Images. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Getty Images Holdings has no effect on the direction of Sapiens International i.e., Sapiens International and Getty Images go up and down completely randomly.
Pair Corralation between Sapiens International and Getty Images
Given the investment horizon of 90 days Sapiens International is expected to generate 0.5 times more return on investment than Getty Images. However, Sapiens International is 2.01 times less risky than Getty Images. It trades about 0.05 of its potential returns per unit of risk. Getty Images Holdings is currently generating about -0.01 per unit of risk. If you would invest 1,798 in Sapiens International on August 26, 2024 and sell it today you would earn a total of 975.00 from holding Sapiens International or generate 54.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sapiens International vs. Getty Images Holdings
Performance |
| Timeline |
| Sapiens International |
| Getty Images Holdings |
Sapiens International and Getty Images Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sapiens International and Getty Images
The main advantage of trading using opposite Sapiens International and Getty Images positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sapiens International position performs unexpectedly, Getty Images 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 Getty Images will offset losses from the drop in Getty Images' long position.| Sapiens International vs. PROS Holdings | Sapiens International vs. Meridianlink | Sapiens International vs. Enfusion | Sapiens International vs. PDF Solutions |
| Getty Images vs. Alphabet Inc Class C | Getty Images vs. Twilio Inc | Getty Images vs. Snap Inc | Getty Images vs. Baidu Inc |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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