Correlation Between Sabvest Capital and FNB ETN

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

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

Diversification Opportunities for Sabvest Capital and FNB ETN

0.82

Correlation Coefficient

Sabvest Capital  FNB ETN

Very poor diversification

The 3 months correlation between Sabvest and FNB is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Sabvest Capital and FNB ETN GSACHSQ in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FNB ETN GSACHSQ and Sabvest Capital 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 Sabvest Capital are associated (or correlated) with FNB ETN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FNB ETN GSACHSQ has no effect on the direction of Sabvest Capital i.e., Sabvest Capital and FNB ETN go up and down completely randomly.

Pair Corralation between Sabvest Capital and FNB ETN

Assuming the 90 days trading horizon Sabvest Capital is expected to generate 2.24 times less return on investment than FNB ETN. But when comparing it to its historical volatility, Sabvest Capital is 1.22 times less risky than FNB ETN. It trades about 0.14 of its potential returns per unit of risk. FNB ETN GSACHSQ is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest  261,500  in FNB ETN GSACHSQ on September 14, 2024 and sell it today you would earn a total of  58,700  from holding FNB ETN GSACHSQ or generate 22.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	41.27%
Values	Daily Returns

Sabvest Capital  vs.  FNB ETN GSACHSQ

Sabvest Capital

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sabvest Capital are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Sabvest Capital exhibited solid returns over the last few months and may actually be approaching a breakup point.

FNB ETN GSACHSQ

Risk-Adjusted Performance

0 of 100

Solid

Over the last 90 days FNB ETN GSACHSQ has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat weak basic indicators, FNB ETN sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sabvest Capital and FNB ETN

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

The idea behind Sabvest Capital and FNB ETN GSACHSQ 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.