Correlation Between Sarine Technologies and Opal Balance

Can any of the company-specific risk be diversified away by investing in both Sarine Technologies and Opal Balance 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 Sarine Technologies and Opal Balance into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Sarine Technologies and Opal Balance

-0.14

Correlation Coefficient

Sarine Technologies  Opal Balance

Good diversification

The 3 months correlation between Sarine and Opal is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Sarine Technologies and Opal Balance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Opal Balance and Sarine 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 Sarine Technologies are associated (or correlated) with Opal Balance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Opal Balance has no effect on the direction of Sarine Technologies i.e., Sarine Technologies and Opal Balance go up and down completely randomly.

Pair Corralation between Sarine Technologies and Opal Balance

Assuming the 90 days trading horizon Sarine Technologies is expected to under-perform the Opal Balance. But the stock apears to be less risky and, when comparing its historical volatility, Sarine Technologies is 1.64 times less risky than Opal Balance. The stock trades about -0.46 of its potential returns per unit of risk. The Opal Balance is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest  18,197  in Opal Balance on September 13, 2024 and sell it today you would earn a total of  2,803  from holding Opal Balance or generate 15.4% return on investment over 90 days.

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

Sarine Technologies  vs.  Opal Balance

Sarine Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sarine Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Opal Balance

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Opal Balance are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Opal Balance sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sarine Technologies and Opal Balance

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

The idea behind Sarine Technologies and Opal Balance 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.