Correlation Between Sabvest Capital and Telemasters Holdings

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

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

Diversification Opportunities for Sabvest Capital and Telemasters Holdings

0.46

Correlation Coefficient

Sabvest Capital  Telemasters Holdings

Very weak diversification

The 3 months correlation between Sabvest and Telemasters is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Sabvest Capital and Telemasters Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telemasters Holdings 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 Telemasters Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Telemasters Holdings has no effect on the direction of Sabvest Capital i.e., Sabvest Capital and Telemasters Holdings go up and down completely randomly.

Pair Corralation between Sabvest Capital and Telemasters Holdings

Assuming the 90 days trading horizon Sabvest Capital is expected to generate 1.26 times more return on investment than Telemasters Holdings. However, Sabvest Capital is 1.26 times more volatile than Telemasters Holdings. It trades about 0.08 of its potential returns per unit of risk. Telemasters Holdings is currently generating about 0.08 per unit of risk. If you would invest  830,000  in Sabvest Capital on October 25, 2024 and sell it today you would earn a total of  96,100  from holding Sabvest Capital or generate 11.58% return on investment over 90 days.

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

Sabvest Capital  vs.  Telemasters Holdings

Sabvest Capital

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Sabvest Capital are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Sabvest Capital exhibited solid returns over the last few months and may actually be approaching a breakup point.

Telemasters Holdings

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Telemasters Holdings are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Telemasters Holdings may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Sabvest Capital and Telemasters Holdings

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

The idea behind Sabvest Capital and Telemasters 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.