Correlation Between Albion Technology and Saga Plc
Can any of the company-specific risk be diversified away by investing in both Albion Technology and Saga Plc 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 Albion Technology and Saga Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Albion Technology General and Saga plc, you can compare the effects of market volatilities on Albion Technology and Saga Plc 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 Albion Technology with a short position of Saga Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Albion Technology and Saga Plc.
Diversification Opportunities for Albion Technology and Saga Plc
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Albion and Saga is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Albion Technology General and Saga plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saga plc and Albion Technology 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 Albion Technology General are associated (or correlated) with Saga Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saga plc has no effect on the direction of Albion Technology i.e., Albion Technology and Saga Plc go up and down completely randomly.
Pair Corralation between Albion Technology and Saga Plc
Assuming the 90 days trading horizon Albion Technology is expected to generate 2.79 times less return on investment than Saga Plc. But when comparing it to its historical volatility, Albion Technology General is 4.4 times less risky than Saga Plc. It trades about 0.02 of its potential returns per unit of risk. Saga plc is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 13,380 in Saga plc on September 14, 2024 and sell it today you would lose (1,160) from holding Saga plc or give up 8.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Albion Technology General vs. Saga plc
Performance |
| Timeline |
| Albion Technology General |
| Saga plc |
Albion Technology and Saga Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Albion Technology and Saga Plc
The main advantage of trading using opposite Albion Technology and Saga Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Albion Technology position performs unexpectedly, Saga Plc 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 Saga Plc will offset losses from the drop in Saga Plc's long position.| Albion Technology vs. Fulcrum Metals PLC | Albion Technology vs. Batm Advanced Communications | Albion Technology vs. Empire Metals Limited | Albion Technology vs. Wheaton Precious Metals |
| Saga Plc vs. Cognizant Technology Solutions | Saga Plc vs. CleanTech Lithium plc | Saga Plc vs. DXC Technology Co | Saga Plc vs. Albion Technology General |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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