Correlation Between Libstar Holdings and Sabvest Capital

Can any of the company-specific risk be diversified away by investing in both Libstar Holdings and Sabvest Capital 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 Libstar Holdings and Sabvest Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Libstar Holdings and Sabvest Capital, you can compare the effects of market volatilities on Libstar Holdings and Sabvest Capital 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 Libstar Holdings with a short position of Sabvest Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Libstar Holdings and Sabvest Capital.

Diversification Opportunities for Libstar Holdings and Sabvest Capital

0.33

Correlation Coefficient

Libstar Holdings  Sabvest Capital

Weak diversification

The 3 months correlation between Libstar and Sabvest is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Libstar Holdings and Sabvest Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sabvest Capital and Libstar Holdings 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 Libstar Holdings are associated (or correlated) with Sabvest Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sabvest Capital has no effect on the direction of Libstar Holdings i.e., Libstar Holdings and Sabvest Capital go up and down completely randomly.

Pair Corralation between Libstar Holdings and Sabvest Capital

Assuming the 90 days trading horizon Libstar Holdings is expected to under-perform the Sabvest Capital. In addition to that, Libstar Holdings is 2.22 times more volatile than Sabvest Capital. It trades about -0.07 of its total potential returns per unit of risk. Sabvest Capital is currently generating about 0.02 per unit of volatility. If you would invest  912,400  in Sabvest Capital on December 25, 2024 and sell it today you would earn a total of  7,600  from holding Sabvest Capital or generate 0.83% return on investment over 90 days.

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

Libstar Holdings  vs.  Sabvest Capital

Libstar Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Libstar Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady 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.

Sabvest Capital

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Sabvest Capital are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Sabvest Capital is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Libstar Holdings and Sabvest Capital

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

The idea behind Libstar Holdings and Sabvest Capital 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.