Correlation Between Exela Technologies and Sapiens International
Can any of the company-specific risk be diversified away by investing in both Exela Technologies and Sapiens International 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 Exela Technologies and Sapiens International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Exela Technologies Preferred and Sapiens International, you can compare the effects of market volatilities on Exela Technologies and Sapiens International 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 Exela Technologies with a short position of Sapiens International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exela Technologies and Sapiens International.
Diversification Opportunities for Exela Technologies and Sapiens International
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Exela and Sapiens is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Exela Technologies Preferred and Sapiens International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sapiens International and Exela Technologies 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 Exela Technologies Preferred are associated (or correlated) with Sapiens International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sapiens International has no effect on the direction of Exela Technologies i.e., Exela Technologies and Sapiens International go up and down completely randomly.
Pair Corralation between Exela Technologies and Sapiens International
Assuming the 90 days horizon Exela Technologies Preferred is expected to under-perform the Sapiens International. In addition to that, Exela Technologies is 1.82 times more volatile than Sapiens International. It trades about -0.48 of its total potential returns per unit of risk. Sapiens International is currently generating about -0.22 per unit of volatility. If you would invest 3,798 in Sapiens International on August 31, 2024 and sell it today you would lose (1,078) from holding Sapiens International or give up 28.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 50.0% |
| Values | Daily Returns |
Exela Technologies Preferred vs. Sapiens International
Performance |
| Timeline |
| Exela Technologies |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Sapiens International |
Exela Technologies and Sapiens International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exela Technologies and Sapiens International
The main advantage of trading using opposite Exela Technologies and Sapiens International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exela Technologies position performs unexpectedly, Sapiens International 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 Sapiens International will offset losses from the drop in Sapiens International's long position.| Exela Technologies vs. Lytus Technologies Holdings | Exela Technologies vs. Quoin Pharmaceuticals Ltd | Exela Technologies vs. HeartCore Enterprises | Exela Technologies vs. Soluna Holdings Preferred |
| Sapiens International vs. MondayCom | Sapiens International vs. Gitlab Inc | Sapiens International vs. DocuSign |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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