Correlation Between Sabien Technology and Iron Mountain

Can any of the company-specific risk be diversified away by investing in both Sabien Technology and Iron Mountain 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 Iron Mountain 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 Iron Mountain, you can compare the effects of market volatilities on Sabien Technology and Iron Mountain 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 Iron Mountain. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sabien Technology and Iron Mountain.

Diversification Opportunities for Sabien Technology and Iron Mountain

-0.29

Correlation Coefficient

Sabien Technology  Iron Mountain

Very good diversification

The 3 months correlation between Sabien and Iron is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Sabien Technology Group and Iron Mountain in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iron Mountain 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 Iron Mountain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iron Mountain has no effect on the direction of Sabien Technology i.e., Sabien Technology and Iron Mountain go up and down completely randomly.

Pair Corralation between Sabien Technology and Iron Mountain

Assuming the 90 days trading horizon Sabien Technology Group is expected to generate 2.69 times more return on investment than Iron Mountain. However, Sabien Technology is 2.69 times more volatile than Iron Mountain. It trades about 0.1 of its potential returns per unit of risk. Iron Mountain is currently generating about -0.05 per unit of risk. If you would invest  975.00  in Sabien Technology Group on October 20, 2024 and sell it today you would earn a total of  175.00  from holding Sabien Technology Group or generate 17.95% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	97.67%
Values	Daily Returns

Sabien Technology Group  vs.  Iron Mountain

Sabien Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sabien Technology Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Sabien Technology is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Iron Mountain

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Iron Mountain has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak 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 Iron Mountain

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

The idea behind Sabien Technology Group and Iron Mountain 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.