Correlation Between Sabvest Capital and NewWave EUR

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

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

Diversification Opportunities for Sabvest Capital and NewWave EUR

0.22

Correlation Coefficient

Sabvest Capital  NewWave EUR

Modest diversification

The 3 months correlation between Sabvest and NewWave is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Sabvest Capital and NewWave EUR Currency in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NewWave EUR Currency and Sabvest Capital 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 Sabvest Capital are associated (or correlated) with NewWave EUR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NewWave EUR Currency has no effect on the direction of Sabvest Capital i.e., Sabvest Capital and NewWave EUR go up and down completely randomly.

Pair Corralation between Sabvest Capital and NewWave EUR

Assuming the 90 days trading horizon Sabvest Capital is expected to generate 3.03 times more return on investment than NewWave EUR. However, Sabvest Capital is 3.03 times more volatile than NewWave EUR Currency. It trades about 0.02 of its potential returns per unit of risk. NewWave EUR Currency is currently generating about 0.02 per unit of risk. If you would invest  805,128  in Sabvest Capital on October 11, 2024 and sell it today you would earn a total of  116,872  from holding Sabvest Capital or generate 14.52% return on investment over 90 days.

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

Sabvest Capital  vs.  NewWave EUR Currency

Sabvest Capital

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Sabvest Capital are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Sabvest Capital may actually be approaching a critical reversion point that can send shares even higher in February 2025.

NewWave EUR Currency

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in NewWave EUR Currency are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong technical and fundamental indicators, NewWave EUR is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Sabvest Capital and NewWave EUR

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

The idea behind Sabvest Capital and NewWave EUR Currency 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.