Correlation Between Saga Communications and Abits
Can any of the company-specific risk be diversified away by investing in both Saga Communications and Abits 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 Communications and Abits into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Saga Communications and Abits Group, you can compare the effects of market volatilities on Saga Communications and Abits 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 Communications with a short position of Abits. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saga Communications and Abits.
Diversification Opportunities for Saga Communications and Abits
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Saga and Abits is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Saga Communications and Abits Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Abits Group and Saga Communications 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 Communications are associated (or correlated) with Abits. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Abits Group has no effect on the direction of Saga Communications i.e., Saga Communications and Abits go up and down completely randomly.
Pair Corralation between Saga Communications and Abits
Considering the 90-day investment horizon Saga Communications is expected to under-perform the Abits. But the stock apears to be less risky and, when comparing its historical volatility, Saga Communications is 3.15 times less risky than Abits. The stock trades about -0.03 of its potential returns per unit of risk. The Abits Group is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 86.00 in Abits Group on September 2, 2024 and sell it today you would lose (24.00) from holding Abits Group or give up 27.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Saga Communications vs. Abits Group
Performance |
| Timeline |
| Saga Communications |
| Abits Group |
Saga Communications and Abits Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Saga Communications and Abits
The main advantage of trading using opposite Saga Communications and Abits positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saga Communications position performs unexpectedly, Abits 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 Abits will offset losses from the drop in Abits' long position.| Saga Communications vs. Nexstar Broadcasting Group | Saga Communications vs. News Corp B | Saga Communications vs. Fox Corp Class | Saga Communications vs. Liberty Media |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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