Correlation Between Sabien Technology and Bloomsbury Publishing

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

Diversification Opportunities for Sabien Technology and Bloomsbury Publishing

0.2

Correlation Coefficient

Sabien Technology  Bloomsbury Publishing

Modest diversification

The 3 months correlation between Sabien and Bloomsbury is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Sabien Technology Group and Bloomsbury Publishing Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bloomsbury Publishing Plc 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 Bloomsbury Publishing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bloomsbury Publishing Plc has no effect on the direction of Sabien Technology i.e., Sabien Technology and Bloomsbury Publishing go up and down completely randomly.

Pair Corralation between Sabien Technology and Bloomsbury Publishing

Assuming the 90 days trading horizon Sabien Technology Group is expected to generate 1.91 times more return on investment than Bloomsbury Publishing. However, Sabien Technology is 1.91 times more volatile than Bloomsbury Publishing Plc. It trades about 0.16 of its potential returns per unit of risk. Bloomsbury Publishing Plc is currently generating about 0.05 per unit of risk. If you would invest  750.00  in Sabien Technology Group on September 16, 2024 and sell it today you would earn a total of  350.00  from holding Sabien Technology Group or generate 46.67% return on investment over 90 days.

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

Sabien Technology Group  vs.  Bloomsbury Publishing Plc

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 uncertain technical and fundamental indicators, Sabien Technology exhibited solid returns over the last few months and may actually be approaching a breakup point.

Bloomsbury Publishing Plc

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Bloomsbury Publishing Plc are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Bloomsbury Publishing may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Sabien Technology and Bloomsbury Publishing

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

The idea behind Sabien Technology Group and Bloomsbury Publishing Plc 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.

Check out your portfolio center.

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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.