Correlation Between Saniona AB and I Tech

Can any of the company-specific risk be diversified away by investing in both Saniona AB and I Tech 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 Saniona AB and I Tech into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Saniona AB and I Tech

0.85

Correlation Coefficient

Saniona AB  I Tech

Very poor diversification

The 3 months correlation between Saniona and ITECH is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Saniona AB and I Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on I Tech and Saniona AB 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 Saniona AB are associated (or correlated) with I Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of I Tech has no effect on the direction of Saniona AB i.e., Saniona AB and I Tech go up and down completely randomly.

Pair Corralation between Saniona AB and I Tech

Assuming the 90 days trading horizon Saniona AB is expected to generate 2.68 times more return on investment than I Tech. However, Saniona AB is 2.68 times more volatile than I Tech. It trades about 0.04 of its potential returns per unit of risk. I Tech is currently generating about 0.07 per unit of risk. If you would invest  650.00  in Saniona AB on October 4, 2024 and sell it today you would earn a total of  138.00  from holding Saniona AB or generate 21.23% return on investment over 90 days.

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

Saniona AB  vs.  I Tech

Saniona AB

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Saniona AB are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Saniona AB sustained solid returns over the last few months and may actually be approaching a breakup point.

I Tech

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in I Tech are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, I Tech unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Saniona AB and I Tech

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

The idea behind Saniona AB and I Tech 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.

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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.