Correlation Between Sarine Technologies and Silver Castle

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

By analyzing existing cross correlation between Sarine Technologies and Silver Castle Holdings, you can compare the effects of market volatilities on Sarine Technologies and Silver Castle 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 Silver Castle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sarine Technologies and Silver Castle.

Diversification Opportunities for Sarine Technologies and Silver Castle

0.59

Correlation Coefficient

Sarine Technologies  Silver Castle

Very weak diversification

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

Pair Corralation between Sarine Technologies and Silver Castle

Assuming the 90 days trading horizon Sarine Technologies is expected to generate 0.41 times more return on investment than Silver Castle. However, Sarine Technologies is 2.43 times less risky than Silver Castle. It trades about 0.01 of its potential returns per unit of risk. Silver Castle Holdings is currently generating about -0.02 per unit of risk. If you would invest  5,990  in Sarine Technologies on December 30, 2024 and sell it today you would lose (40.00) from holding Sarine Technologies or give up 0.67% of portfolio value over 90 days.

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

Sarine Technologies  vs.  Silver Castle Holdings

Sarine Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sarine Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Sarine Technologies is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Silver Castle Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Silver Castle Holdings 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.

Pair Trading with Sarine Technologies and Silver Castle

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

The idea behind Sarine Technologies and Silver Castle Holdings 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.