Correlation Between Saga Plc and Bankers Investment
Can any of the company-specific risk be diversified away by investing in both Saga Plc and Bankers Investment 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 Saga Plc and Bankers Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Saga plc and Bankers Investment Trust, you can compare the effects of market volatilities on Saga Plc and Bankers Investment 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 Saga Plc with a short position of Bankers Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saga Plc and Bankers Investment.
Diversification Opportunities for Saga Plc and Bankers Investment
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Saga and Bankers is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Saga plc and Bankers Investment Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bankers Investment Trust and Saga Plc 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 Saga plc are associated (or correlated) with Bankers Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bankers Investment Trust has no effect on the direction of Saga Plc i.e., Saga Plc and Bankers Investment go up and down completely randomly.
Pair Corralation between Saga Plc and Bankers Investment
Assuming the 90 days trading horizon Saga plc is expected to generate 6.37 times more return on investment than Bankers Investment. However, Saga Plc is 6.37 times more volatile than Bankers Investment Trust. It trades about 0.22 of its potential returns per unit of risk. Bankers Investment Trust is currently generating about 0.1 per unit of risk. If you would invest 10,940 in Saga plc on September 13, 2024 and sell it today you would earn a total of 1,660 from holding Saga plc or generate 15.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Saga plc vs. Bankers Investment Trust
Performance |
| Timeline |
| Saga plc |
| Bankers Investment Trust |
Saga Plc and Bankers Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Saga Plc and Bankers Investment
The main advantage of trading using opposite Saga Plc and Bankers Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saga Plc position performs unexpectedly, Bankers Investment 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 Bankers Investment will offset losses from the drop in Bankers Investment's long position.| Saga Plc vs. New Residential Investment | Saga Plc vs. Taylor Maritime Investments | Saga Plc vs. Axfood AB | Saga Plc vs. FC Investment Trust |
| Bankers Investment vs. Catalyst Media Group | Bankers Investment vs. CATLIN GROUP | Bankers Investment vs. Tamburi Investment Partners | Bankers Investment vs. Magnora ASA |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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