Correlation Between Hansa Investment and Sabien Technology

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

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

Diversification Opportunities for Hansa Investment and Sabien Technology

0.03

Correlation Coefficient

Hansa Investment  Sabien Technology

Significant diversification

The 3 months correlation between Hansa and Sabien is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Hansa Investment and Sabien Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sabien Technology and Hansa Investment 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 Hansa Investment 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 Hansa Investment i.e., Hansa Investment and Sabien Technology go up and down completely randomly.

Pair Corralation between Hansa Investment and Sabien Technology

Assuming the 90 days trading horizon Hansa Investment is expected to generate 0.45 times more return on investment than Sabien Technology. However, Hansa Investment is 2.25 times less risky than Sabien Technology. It trades about 0.05 of its potential returns per unit of risk. Sabien Technology Group is currently generating about 0.02 per unit of risk. If you would invest  17,996  in Hansa Investment on October 3, 2024 and sell it today you would earn a total of  4,904  from holding Hansa Investment or generate 27.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Hansa Investment  vs.  Sabien Technology Group

Hansa Investment

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Hansa Investment are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Hansa Investment 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

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Sabien Technology Group are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Sabien Technology exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Hansa Investment and Sabien Technology

The main advantage of trading using opposite Hansa Investment and Sabien Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hansa Investment 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 Hansa Investment 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.