Correlation Between SVB Financial and Lupatech

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

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

Diversification Opportunities for SVB Financial and Lupatech

0.0

Correlation Coefficient

SVB Financial  Lupatech

Pay attention - limited upside

The 3 months correlation between SVB and Lupatech is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SVB Financial Group and Lupatech SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lupatech SA and SVB Financial 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 SVB Financial Group are associated (or correlated) with Lupatech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lupatech SA has no effect on the direction of SVB Financial i.e., SVB Financial and Lupatech go up and down completely randomly.

Pair Corralation between SVB Financial and Lupatech

If you would invest  12,007  in SVB Financial Group on September 3, 2024 and sell it today you would earn a total of  0.00  from holding SVB Financial Group or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

SVB Financial Group  vs.  Lupatech SA

SVB Financial Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SVB Financial Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong forward indicators, SVB Financial is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Lupatech SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lupatech SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with SVB Financial and Lupatech

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

The idea behind SVB Financial Group and Lupatech SA 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.