Correlation Between Sabien Technology and Hershey

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

By analyzing existing cross correlation between Sabien Technology Group and Hershey Co, you can compare the effects of market volatilities on Sabien Technology and Hershey 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 Sabien Technology with a short position of Hershey. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sabien Technology and Hershey.

Diversification Opportunities for Sabien Technology and Hershey

-0.36

Correlation Coefficient

Sabien Technology  Hershey

Very good diversification

The 3 months correlation between Sabien and Hershey is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Sabien Technology Group and Hershey Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hershey and Sabien Technology 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 Sabien Technology Group are associated (or correlated) with Hershey. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hershey has no effect on the direction of Sabien Technology i.e., Sabien Technology and Hershey go up and down completely randomly.

Pair Corralation between Sabien Technology and Hershey

Assuming the 90 days trading horizon Sabien Technology Group is expected to generate 2.29 times more return on investment than Hershey. However, Sabien Technology is 2.29 times more volatile than Hershey Co. It trades about 0.03 of its potential returns per unit of risk. Hershey Co is currently generating about 0.01 per unit of risk. If you would invest  955.00  in Sabien Technology Group on September 14, 2024 and sell it today you would earn a total of  145.00  from holding Sabien Technology Group or generate 15.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.8%
Values	Daily Returns

Sabien Technology Group  vs.  Hershey Co

Sabien Technology

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sabien Technology Group are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Sabien Technology exhibited solid returns over the last few months and may actually be approaching a breakup point.

Hershey

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hershey Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Sabien Technology and Hershey

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

The idea behind Sabien Technology Group and Hershey Co 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.