Correlation Between Sapiens International and 26442CAE4

Can any of the company-specific risk be diversified away by investing in both Sapiens International and 26442CAE4 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 26442CAE4 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Sapiens International and DUKE ENERGY CAROLINAS, you can compare the effects of market volatilities on Sapiens International and 26442CAE4 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 26442CAE4. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sapiens International and 26442CAE4.

Diversification Opportunities for Sapiens International and 26442CAE4

-0.36

Correlation Coefficient

Sapiens International  26442CAE4

Very good diversification

The 3 months correlation between Sapiens and 26442CAE4 is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Sapiens International and DUKE ENERGY CAROLINAS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DUKE ENERGY CAROLINAS 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 26442CAE4. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DUKE ENERGY CAROLINAS has no effect on the direction of Sapiens International i.e., Sapiens International and 26442CAE4 go up and down completely randomly.

Pair Corralation between Sapiens International and 26442CAE4

Given the investment horizon of 90 days Sapiens International is expected to under-perform the 26442CAE4. In addition to that, Sapiens International is 1.17 times more volatile than DUKE ENERGY CAROLINAS. It trades about 0.0 of its total potential returns per unit of risk. DUKE ENERGY CAROLINAS is currently generating about 0.08 per unit of volatility. If you would invest  10,609  in DUKE ENERGY CAROLINAS on December 26, 2024 and sell it today you would earn a total of  479.00  from holding DUKE ENERGY CAROLINAS or generate 4.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	70.0%
Values	Daily Returns

Sapiens International  vs.  DUKE ENERGY CAROLINAS

Sapiens International

Risk-Adjusted Performance

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 comparatively stable basic indicators, Sapiens International is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

DUKE ENERGY CAROLINAS

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in DUKE ENERGY CAROLINAS are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting basic indicators, 26442CAE4 may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Sapiens International and 26442CAE4

The main advantage of trading using opposite Sapiens International and 26442CAE4 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sapiens International position performs unexpectedly, 26442CAE4 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 26442CAE4 will offset losses from the drop in 26442CAE4's long position.

The idea behind Sapiens International and DUKE ENERGY CAROLINAS 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.