Correlation Between Sarine Technologies and Unicorn Technologies

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

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

Diversification Opportunities for Sarine Technologies and Unicorn Technologies

0.47

Correlation Coefficient

Sarine Technologies  Unicorn Technologies

Very weak diversification

The 3 months correlation between Sarine and Unicorn is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Sarine Technologies and Unicorn Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unicorn Technologies and Sarine Technologies 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 Sarine Technologies are associated (or correlated) with Unicorn Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unicorn Technologies has no effect on the direction of Sarine Technologies i.e., Sarine Technologies and Unicorn Technologies go up and down completely randomly.

Pair Corralation between Sarine Technologies and Unicorn Technologies

Assuming the 90 days trading horizon Sarine Technologies is expected to under-perform the Unicorn Technologies. But the stock apears to be less risky and, when comparing its historical volatility, Sarine Technologies is 2.16 times less risky than Unicorn Technologies. The stock trades about -0.31 of its potential returns per unit of risk. The Unicorn Technologies is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  4,040  in Unicorn Technologies on September 28, 2024 and sell it today you would earn a total of  100.00  from holding Unicorn Technologies or generate 2.48% return on investment over 90 days.

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

Sarine Technologies  vs.  Unicorn Technologies

Sarine Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sarine Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Unicorn Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Sarine Technologies and Unicorn Technologies

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

The idea behind Sarine Technologies and Unicorn 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.

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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.