Correlation Between Sabien Technology and Spire Healthcare

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

Diversification Opportunities for Sabien Technology and Spire Healthcare

0.63

Correlation Coefficient

Sabien Technology  Spire Healthcare

Poor diversification

The 3 months correlation between Sabien and Spire is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Sabien Technology Group and Spire Healthcare Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spire Healthcare 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 Spire Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spire Healthcare has no effect on the direction of Sabien Technology i.e., Sabien Technology and Spire Healthcare go up and down completely randomly.

Pair Corralation between Sabien Technology and Spire Healthcare

Assuming the 90 days trading horizon Sabien Technology Group is expected to under-perform the Spire Healthcare. But the stock apears to be less risky and, when comparing its historical volatility, Sabien Technology Group is 1.33 times less risky than Spire Healthcare. The stock trades about -0.45 of its potential returns per unit of risk. The Spire Healthcare Group is currently generating about -0.13 of returns per unit of risk over similar time horizon. If you would invest  22,350  in Spire Healthcare Group on December 29, 2024 and sell it today you would lose (4,490) from holding Spire Healthcare Group or give up 20.09% of portfolio value over 90 days.

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

Sabien Technology Group  vs.  Spire Healthcare Group

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.

Spire Healthcare

Risk-Adjusted Performance

Very Weak

Over the last 90 days Spire Healthcare Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady 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.

Pair Trading with Sabien Technology and Spire Healthcare

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

The idea behind Sabien Technology Group and Spire Healthcare Group 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.