Correlation Between SaverOne 2014 and FARO Technologies

Can any of the company-specific risk be diversified away by investing in both SaverOne 2014 and FARO Technologies 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 SaverOne 2014 and FARO Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SaverOne 2014 Ltd and FARO Technologies, you can compare the effects of market volatilities on SaverOne 2014 and FARO Technologies 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 SaverOne 2014 with a short position of FARO Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of SaverOne 2014 and FARO Technologies.

Diversification Opportunities for SaverOne 2014 and FARO Technologies

0.15

Correlation Coefficient

SaverOne 2014  FARO Technologies

Average diversification

The 3 months correlation between SaverOne and FARO is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding SaverOne 2014 Ltd and FARO Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FARO Technologies and SaverOne 2014 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 SaverOne 2014 Ltd are associated (or correlated) with FARO Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FARO Technologies has no effect on the direction of SaverOne 2014 i.e., SaverOne 2014 and FARO Technologies go up and down completely randomly.

Pair Corralation between SaverOne 2014 and FARO Technologies

Assuming the 90 days horizon SaverOne 2014 Ltd is expected to generate 7.9 times more return on investment than FARO Technologies. However, SaverOne 2014 is 7.9 times more volatile than FARO Technologies. It trades about 0.19 of its potential returns per unit of risk. FARO Technologies is currently generating about 0.06 per unit of risk. If you would invest  1.71  in SaverOne 2014 Ltd on December 28, 2024 and sell it today you would earn a total of  1.17  from holding SaverOne 2014 Ltd or generate 68.42% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	61.67%
Values	Daily Returns

SaverOne 2014 Ltd  vs.  FARO Technologies

SaverOne 2014

Risk-Adjusted Performance

Good

Over the last 90 days SaverOne 2014 Ltd has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly unsteady technical and fundamental indicators, SaverOne 2014 showed solid returns over the last few months and may actually be approaching a breakup point.

FARO Technologies

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in FARO Technologies are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, FARO Technologies displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SaverOne 2014 and FARO Technologies

The main advantage of trading using opposite SaverOne 2014 and FARO Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SaverOne 2014 position performs unexpectedly, FARO Technologies 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 FARO Technologies will offset losses from the drop in FARO Technologies' long position.

The idea behind SaverOne 2014 Ltd and FARO Technologies 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.