Correlation Between Sapiens International and SmartStop Self

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

By analyzing existing cross correlation between Sapiens International and SmartStop Self Storage, you can compare the effects of market volatilities on Sapiens International and SmartStop Self 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 SmartStop Self. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sapiens International and SmartStop Self.

Diversification Opportunities for Sapiens International and SmartStop Self

-0.08

Correlation Coefficient

Sapiens International  SmartStop Self

Good diversification

The 3 months correlation between Sapiens and SmartStop is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Sapiens International and SmartStop Self Storage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SmartStop Self Storage 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 SmartStop Self. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SmartStop Self Storage has no effect on the direction of Sapiens International i.e., Sapiens International and SmartStop Self go up and down completely randomly.

Pair Corralation between Sapiens International and SmartStop Self

Given the investment horizon of 90 days Sapiens International is expected to generate 0.52 times more return on investment than SmartStop Self. However, Sapiens International is 1.91 times less risky than SmartStop Self. It trades about 0.02 of its potential returns per unit of risk. SmartStop Self Storage is currently generating about 0.0 per unit of risk. If you would invest  2,581  in Sapiens International on August 31, 2024 and sell it today you would earn a total of  152.00  from holding Sapiens International or generate 5.89% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.73%
Values	Daily Returns

Sapiens International  vs.  SmartStop Self Storage

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 weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in December 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

SmartStop Self Storage

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SmartStop Self Storage has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, SmartStop Self is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Sapiens International and SmartStop Self

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

The idea behind Sapiens International and SmartStop Self Storage 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.