Correlation Between Sapiens International and Hybrid Kinetic

Can any of the company-specific risk be diversified away by investing in both Sapiens International and Hybrid Kinetic 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 Sapiens International and Hybrid Kinetic into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Sapiens International and Hybrid Kinetic Group, you can compare the effects of market volatilities on Sapiens International and Hybrid Kinetic 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 Sapiens International with a short position of Hybrid Kinetic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sapiens International and Hybrid Kinetic.

Diversification Opportunities for Sapiens International and Hybrid Kinetic

0.28

Correlation Coefficient

Sapiens International  Hybrid Kinetic

Modest diversification

The 3 months correlation between Sapiens and Hybrid is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Sapiens International and Hybrid Kinetic Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hybrid Kinetic Group and Sapiens International 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 Sapiens International are associated (or correlated) with Hybrid Kinetic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hybrid Kinetic Group has no effect on the direction of Sapiens International i.e., Sapiens International and Hybrid Kinetic go up and down completely randomly.

Pair Corralation between Sapiens International and Hybrid Kinetic

Given the investment horizon of 90 days Sapiens International is expected to generate 0.3 times more return on investment than Hybrid Kinetic. However, Sapiens International is 3.36 times less risky than Hybrid Kinetic. It trades about -0.08 of its potential returns per unit of risk. Hybrid Kinetic Group is currently generating about -0.12 per unit of risk. If you would invest  3,608  in Sapiens International on September 16, 2024 and sell it today you would lose (760.00) from holding Sapiens International or give up 21.06% of portfolio value over 90 days.

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

Sapiens International  vs.  Hybrid Kinetic Group

Sapiens International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sapiens International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Hybrid Kinetic Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hybrid Kinetic Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Sapiens International and Hybrid Kinetic

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

The idea behind Sapiens International and Hybrid Kinetic 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.

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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.