Correlation Between Garrett Motion and SAG Holdings
Can any of the company-specific risk be diversified away by investing in both Garrett Motion 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 Garrett Motion and SAG Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Garrett Motion and SAG Holdings Limited, you can compare the effects of market volatilities on Garrett Motion 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 Garrett Motion with a short position of SAG Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Garrett Motion and SAG Holdings.
Diversification Opportunities for Garrett Motion and SAG Holdings
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Garrett and SAG is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Garrett Motion 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 Garrett Motion 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 Garrett Motion 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 Garrett Motion i.e., Garrett Motion and SAG Holdings go up and down completely randomly.
Pair Corralation between Garrett Motion and SAG Holdings
Considering the 90-day investment horizon Garrett Motion is expected to generate 0.57 times more return on investment than SAG Holdings. However, Garrett Motion is 1.75 times less risky than SAG Holdings. It trades about -0.05 of its potential returns per unit of risk. SAG Holdings Limited is currently generating about -0.44 per unit of risk. If you would invest 939.00 in Garrett Motion on November 18, 2024 and sell it today you would lose (19.00) from holding Garrett Motion or give up 2.02% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Garrett Motion vs. SAG Holdings Limited
Performance |
| Timeline |
| Garrett Motion |
| SAG Holdings Limited |
Garrett Motion and SAG Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Garrett Motion and SAG Holdings
The main advantage of trading using opposite Garrett Motion and SAG Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Garrett Motion 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.| Garrett Motion vs. Resideo Technologies | Garrett Motion vs. AdvanSix | Garrett Motion vs. GrafTech International | Garrett Motion vs. Innoviva |
| SAG Holdings vs. Transocean | SAG Holdings vs. Eldorado Gold Corp | SAG Holdings vs. Seadrill Limited | SAG Holdings vs. Integrated Drilling Equipment |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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