Correlation Between Sage Group and GreenX Metals
Can any of the company-specific risk be diversified away by investing in both Sage Group and GreenX Metals 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 Sage Group and GreenX Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sage Group PLC and GreenX Metals, you can compare the effects of market volatilities on Sage Group and GreenX Metals 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 Sage Group with a short position of GreenX Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sage Group and GreenX Metals.
Diversification Opportunities for Sage Group and GreenX Metals
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Sage and GreenX is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Sage Group PLC and GreenX Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GreenX Metals and Sage Group 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 Sage Group PLC are associated (or correlated) with GreenX Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GreenX Metals has no effect on the direction of Sage Group i.e., Sage Group and GreenX Metals go up and down completely randomly.
Pair Corralation between Sage Group and GreenX Metals
Assuming the 90 days trading horizon Sage Group is expected to generate 2.22 times less return on investment than GreenX Metals. But when comparing it to its historical volatility, Sage Group PLC is 1.37 times less risky than GreenX Metals. It trades about 0.13 of its potential returns per unit of risk. GreenX Metals is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 3,400 in GreenX Metals on October 20, 2024 and sell it today you would earn a total of 150.00 from holding GreenX Metals or generate 4.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Sage Group PLC vs. GreenX Metals
Performance |
| Timeline |
| Sage Group PLC |
| GreenX Metals |
Sage Group and GreenX Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sage Group and GreenX Metals
The main advantage of trading using opposite Sage Group and GreenX Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sage Group position performs unexpectedly, GreenX Metals 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 GreenX Metals will offset losses from the drop in GreenX Metals' long position.| Sage Group vs. Berkshire Hathaway | Sage Group vs. Samsung Electronics Co | Sage Group vs. Samsung Electronics Co | Sage Group vs. Chocoladefabriken Lindt Spruengli |
| GreenX Metals vs. Arrow Electronics | GreenX Metals vs. UNIQA Insurance Group | GreenX Metals vs. Costco Wholesale Corp | GreenX Metals vs. Norwegian Air Shuttle |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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