Correlation Between Sabio Holdings and Apple

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

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

Diversification Opportunities for Sabio Holdings and Apple

0.23

Correlation Coefficient

Sabio Holdings  Apple

Modest diversification

The 3 months correlation between Sabio and Apple is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Sabio Holdings and Apple Inc CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc CDR and Sabio 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 Sabio Holdings are associated (or correlated) with Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Inc CDR has no effect on the direction of Sabio Holdings i.e., Sabio Holdings and Apple go up and down completely randomly.

Pair Corralation between Sabio Holdings and Apple

Assuming the 90 days trading horizon Sabio Holdings is expected to generate 4.39 times more return on investment than Apple. However, Sabio Holdings is 4.39 times more volatile than Apple Inc CDR. It trades about 0.04 of its potential returns per unit of risk. Apple Inc CDR is currently generating about 0.13 per unit of risk. If you would invest  43.00  in Sabio Holdings on September 12, 2024 and sell it today you would earn a total of  3.00  from holding Sabio Holdings or generate 6.98% return on investment over 90 days.

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

Sabio Holdings  vs.  Apple Inc CDR

Sabio Holdings

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Sabio Holdings are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak forward indicators, Sabio Holdings showed solid returns over the last few months and may actually be approaching a breakup point.

Apple Inc CDR

Risk-Adjusted Performance

10 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Apple Inc CDR are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather abnormal technical and fundamental indicators, Apple may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Sabio Holdings and Apple

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

The idea behind Sabio Holdings and Apple Inc CDR 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.