Correlation Between Sabien Technology and Mindflair Plc

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

Diversification Opportunities for Sabien Technology and Mindflair Plc

-0.53

Correlation Coefficient

Sabien Technology  Mindflair Plc

Excellent diversification

The 3 months correlation between Sabien and Mindflair is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Sabien Technology Group and Mindflair Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mindflair 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 Mindflair Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mindflair Plc has no effect on the direction of Sabien Technology i.e., Sabien Technology and Mindflair Plc go up and down completely randomly.

Pair Corralation between Sabien Technology and Mindflair Plc

Assuming the 90 days trading horizon Sabien Technology is expected to generate 32.7 times less return on investment than Mindflair Plc. But when comparing it to its historical volatility, Sabien Technology Group is 2.88 times less risky than Mindflair Plc. It trades about 0.01 of its potential returns per unit of risk. Mindflair Plc is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  73.00  in Mindflair Plc on October 13, 2024 and sell it today you would earn a total of  10.00  from holding Mindflair Plc or generate 13.7% return on investment over 90 days.

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

Sabien Technology Group  vs.  Mindflair Plc

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 latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Mindflair Plc

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Mindflair Plc are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Mindflair Plc unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sabien Technology and Mindflair Plc

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

The idea behind Sabien Technology Group and Mindflair 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.