Correlation Between Roebuck Food and Sage Group
Can any of the company-specific risk be diversified away by investing in both Roebuck Food and Sage Group 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 Roebuck Food and Sage Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Roebuck Food Group and Sage Group PLC, you can compare the effects of market volatilities on Roebuck Food and Sage Group 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 Roebuck Food with a short position of Sage Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Roebuck Food and Sage Group.
Diversification Opportunities for Roebuck Food and Sage Group
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Roebuck and Sage is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Roebuck Food Group and Sage Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sage Group PLC and Roebuck Food 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 Roebuck Food Group are associated (or correlated) with Sage Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sage Group PLC has no effect on the direction of Roebuck Food i.e., Roebuck Food and Sage Group go up and down completely randomly.
Pair Corralation between Roebuck Food and Sage Group
Assuming the 90 days trading horizon Roebuck Food Group is expected to generate 1.01 times more return on investment than Sage Group. However, Roebuck Food is 1.01 times more volatile than Sage Group PLC. It trades about 0.36 of its potential returns per unit of risk. Sage Group PLC is currently generating about 0.28 per unit of risk. If you would invest 1,660 in Roebuck Food Group on October 28, 2024 and sell it today you would earn a total of 90.00 from holding Roebuck Food Group or generate 5.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Roebuck Food Group vs. Sage Group PLC
Performance |
| Timeline |
| Roebuck Food Group |
| Sage Group PLC |
Roebuck Food and Sage Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Roebuck Food and Sage Group
The main advantage of trading using opposite Roebuck Food and Sage Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Roebuck Food position performs unexpectedly, Sage Group 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 Sage Group will offset losses from the drop in Sage Group's long position.| Roebuck Food vs. Take Two Interactive Software | Roebuck Food vs. Young Cos Brewery | Roebuck Food vs. Oxford Technology 2 | Roebuck Food vs. Pfeiffer Vacuum Technology |
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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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