Correlation Between Sabien Technology and Judges Scientific

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

Diversification Opportunities for Sabien Technology and Judges Scientific

0.34

Correlation Coefficient

Sabien Technology  Judges Scientific

Weak diversification

The 3 months correlation between Sabien and Judges is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Sabien Technology Group and Judges Scientific Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Judges Scientific 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 Judges Scientific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Judges Scientific Plc has no effect on the direction of Sabien Technology i.e., Sabien Technology and Judges Scientific go up and down completely randomly.

Pair Corralation between Sabien Technology and Judges Scientific

Assuming the 90 days trading horizon Sabien Technology Group is expected to under-perform the Judges Scientific. But the stock apears to be less risky and, when comparing its historical volatility, Sabien Technology Group is 1.17 times less risky than Judges Scientific. The stock trades about -0.44 of its potential returns per unit of risk. The Judges Scientific Plc is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  858,000  in Judges Scientific Plc on December 30, 2024 and sell it today you would lose (44,000) from holding Judges Scientific Plc or give up 5.13% of portfolio value over 90 days.

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

Sabien Technology Group  vs.  Judges Scientific Plc

Sabien Technology

Risk-Adjusted Performance

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 conflicting performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Judges Scientific Plc

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Sabien Technology and Judges Scientific

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

The idea behind Sabien Technology Group and Judges Scientific 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.

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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.