Correlation Between Sebata Holdings and Afine Investments

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

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

Diversification Opportunities for Sebata Holdings and Afine Investments

-0.02

Correlation Coefficient

Sebata Holdings  Afine Investments

Good diversification

The 3 months correlation between Sebata and Afine is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Sebata Holdings and Afine Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Afine Investments and Sebata 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 Sebata Holdings are associated (or correlated) with Afine Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Afine Investments has no effect on the direction of Sebata Holdings i.e., Sebata Holdings and Afine Investments go up and down completely randomly.

Pair Corralation between Sebata Holdings and Afine Investments

Assuming the 90 days trading horizon Sebata Holdings is expected to generate 0.53 times more return on investment than Afine Investments. However, Sebata Holdings is 1.89 times less risky than Afine Investments. It trades about 0.07 of its potential returns per unit of risk. Afine Investments is currently generating about -0.04 per unit of risk. If you would invest  9,500  in Sebata Holdings on September 27, 2024 and sell it today you would earn a total of  300.00  from holding Sebata Holdings or generate 3.16% return on investment over 90 days.

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

Sebata Holdings  vs.  Afine Investments

Sebata Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sebata Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Afine Investments

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Afine Investments are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Afine Investments exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sebata Holdings and Afine Investments

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

The idea behind Sebata Holdings and Afine Investments 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.