Correlation Between Sebata Holdings and Brait SE

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

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

Diversification Opportunities for Sebata Holdings and Brait SE

-0.57

Correlation Coefficient

Sebata Holdings  Brait SE

Excellent diversification

The 3 months correlation between Sebata and Brait is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Sebata Holdings and Brait SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brait SE 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 Brait SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brait SE has no effect on the direction of Sebata Holdings i.e., Sebata Holdings and Brait SE go up and down completely randomly.

Pair Corralation between Sebata Holdings and Brait SE

Assuming the 90 days trading horizon Sebata Holdings is expected to generate 1.3 times more return on investment than Brait SE. However, Sebata Holdings is 1.3 times more volatile than Brait SE. It trades about 0.07 of its potential returns per unit of risk. Brait SE 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	Very Weak
Accuracy	100.0%
Values	Daily Returns

Sebata Holdings  vs.  Brait SE

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.

Brait SE

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Brait SE are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Brait SE exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sebata Holdings and Brait SE

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

The idea behind Sebata Holdings and Brait SE 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.