Correlation Between Sapiens International and Himalaya Shipping
Can any of the company-specific risk be diversified away by investing in both Sapiens International and Himalaya Shipping 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 Himalaya Shipping into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sapiens International and Himalaya Shipping, you can compare the effects of market volatilities on Sapiens International and Himalaya Shipping 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 Himalaya Shipping. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sapiens International and Himalaya Shipping.
Diversification Opportunities for Sapiens International and Himalaya Shipping
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sapiens and Himalaya is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Sapiens International and Himalaya Shipping in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Himalaya Shipping 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 Himalaya Shipping. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Himalaya Shipping has no effect on the direction of Sapiens International i.e., Sapiens International and Himalaya Shipping go up and down completely randomly.
Pair Corralation between Sapiens International and Himalaya Shipping
Given the investment horizon of 90 days Sapiens International is expected to generate 0.54 times more return on investment than Himalaya Shipping. However, Sapiens International is 1.85 times less risky than Himalaya Shipping. It trades about 0.21 of its potential returns per unit of risk. Himalaya Shipping is currently generating about -0.04 per unit of risk. If you would invest 2,576 in Sapiens International on November 9, 2024 and sell it today you would earn a total of 170.00 from holding Sapiens International or generate 6.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sapiens International vs. Himalaya Shipping
Performance |
| Timeline |
| Sapiens International |
| Himalaya Shipping |
Sapiens International and Himalaya Shipping Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sapiens International and Himalaya Shipping
The main advantage of trading using opposite Sapiens International and Himalaya Shipping positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sapiens International position performs unexpectedly, Himalaya Shipping 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 Himalaya Shipping will offset losses from the drop in Himalaya Shipping's long position.| Sapiens International vs. PROS Holdings | Sapiens International vs. Meridianlink | Sapiens International vs. Enfusion | Sapiens International vs. PDF Solutions |
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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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