Correlation Between Sachem Capital and SCCG
Can any of the company-specific risk be diversified away by investing in both Sachem Capital and SCCG 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 Sachem Capital and SCCG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sachem Capital Corp and SCCG, you can compare the effects of market volatilities on Sachem Capital and SCCG 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 Sachem Capital with a short position of SCCG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sachem Capital and SCCG.
Diversification Opportunities for Sachem Capital and SCCG
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Sachem and SCCG is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Sachem Capital Corp and SCCG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCCG and Sachem Capital 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 Sachem Capital Corp are associated (or correlated) with SCCG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCCG has no effect on the direction of Sachem Capital i.e., Sachem Capital and SCCG go up and down completely randomly.
Pair Corralation between Sachem Capital and SCCG
Given the investment horizon of 90 days Sachem Capital Corp is expected to generate 0.78 times more return on investment than SCCG. However, Sachem Capital Corp is 1.28 times less risky than SCCG. It trades about -0.02 of its potential returns per unit of risk. SCCG is currently generating about -0.03 per unit of risk. If you would invest 2,166 in Sachem Capital Corp on August 31, 2024 and sell it today you would lose (49.05) from holding Sachem Capital Corp or give up 2.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.21% |
| Values | Daily Returns |
Sachem Capital Corp vs. SCCG
Performance |
| Timeline |
| Sachem Capital Corp |
| SCCG |
Sachem Capital and SCCG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sachem Capital and SCCG
The main advantage of trading using opposite Sachem Capital and SCCG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sachem Capital position performs unexpectedly, SCCG 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 SCCG will offset losses from the drop in SCCG's long position.| Sachem Capital vs. SCCG | Sachem Capital vs. B Riley Financial | Sachem Capital vs. B Riley Financial | Sachem Capital vs. B Riley Financial, |
| SCCG vs. Sachem Capital Corp | SCCG vs. Babcock Wilcox Enterprises, | SCCG vs. B Riley Financial, | SCCG vs. B Riley Financial |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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