Correlation Between AMG Advanced and Sabien Technology

Can any of the company-specific risk be diversified away by investing in both AMG Advanced and Sabien Technology 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 AMG Advanced and Sabien Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between AMG Advanced Metallurgical and Sabien Technology Group, you can compare the effects of market volatilities on AMG Advanced and Sabien Technology 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 AMG Advanced with a short position of Sabien Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMG Advanced and Sabien Technology.

Diversification Opportunities for AMG Advanced and Sabien Technology

-0.59

Correlation Coefficient

AMG Advanced  Sabien Technology

Excellent diversification

The 3 months correlation between AMG and Sabien is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding AMG Advanced Metallurgical and Sabien Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sabien Technology and AMG Advanced 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 AMG Advanced Metallurgical are associated (or correlated) with Sabien Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sabien Technology has no effect on the direction of AMG Advanced i.e., AMG Advanced and Sabien Technology go up and down completely randomly.

Pair Corralation between AMG Advanced and Sabien Technology

Assuming the 90 days trading horizon AMG Advanced Metallurgical is expected to under-perform the Sabien Technology. But the stock apears to be less risky and, when comparing its historical volatility, AMG Advanced Metallurgical is 1.41 times less risky than Sabien Technology. The stock trades about -0.05 of its potential returns per unit of risk. The Sabien Technology Group is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  925.00  in Sabien Technology Group on December 5, 2024 and sell it today you would lose (25.00) from holding Sabien Technology Group or give up 2.7% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

AMG Advanced Metallurgical  vs.  Sabien Technology Group

AMG Advanced Metallu

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in AMG Advanced Metallurgical are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, AMG Advanced is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Sabien Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sabien Technology Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with AMG Advanced and Sabien Technology

The main advantage of trading using opposite AMG Advanced and Sabien Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMG Advanced position performs unexpectedly, Sabien Technology 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 Sabien Technology will offset losses from the drop in Sabien Technology's long position.

The idea behind AMG Advanced Metallurgical and Sabien Technology Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.