Correlation Between Flexible Solutions and SAG Holdings
Can any of the company-specific risk be diversified away by investing in both Flexible Solutions and SAG Holdings 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 Flexible Solutions and SAG Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Flexible Solutions International and SAG Holdings Limited, you can compare the effects of market volatilities on Flexible Solutions and SAG Holdings 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 Flexible Solutions with a short position of SAG Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flexible Solutions and SAG Holdings.
Diversification Opportunities for Flexible Solutions and SAG Holdings
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Flexible and SAG is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Flexible Solutions Internation and SAG Holdings Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SAG Holdings Limited and Flexible Solutions 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 Flexible Solutions International are associated (or correlated) with SAG Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SAG Holdings Limited has no effect on the direction of Flexible Solutions i.e., Flexible Solutions and SAG Holdings go up and down completely randomly.
Pair Corralation between Flexible Solutions and SAG Holdings
Considering the 90-day investment horizon Flexible Solutions International is expected to generate 0.71 times more return on investment than SAG Holdings. However, Flexible Solutions International is 1.41 times less risky than SAG Holdings. It trades about 0.02 of its potential returns per unit of risk. SAG Holdings Limited is currently generating about -0.21 per unit of risk. If you would invest 406.00 in Flexible Solutions International on August 31, 2024 and sell it today you would lose (1.00) from holding Flexible Solutions International or give up 0.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Flexible Solutions Internation vs. SAG Holdings Limited
Performance |
| Timeline |
| Flexible Solutions |
| SAG Holdings Limited |
Flexible Solutions and SAG Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flexible Solutions and SAG Holdings
The main advantage of trading using opposite Flexible Solutions and SAG Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flexible Solutions position performs unexpectedly, SAG Holdings 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 SAG Holdings will offset losses from the drop in SAG Holdings' long position.| Flexible Solutions vs. Orion Engineered Carbons | Flexible Solutions vs. International Flavors Fragrances | Flexible Solutions vs. Sociedad Quimica y | Flexible Solutions vs. Albemarle Corp |
| SAG Holdings vs. MagnaChip Semiconductor | SAG Holdings vs. Ecovyst | SAG Holdings vs. Flexible Solutions International | SAG Holdings vs. Vishay Intertechnology |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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