Correlation Between Sage Group and Jadestone Energy
Can any of the company-specific risk be diversified away by investing in both Sage Group and Jadestone Energy 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 Jadestone Energy 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 Jadestone Energy, you can compare the effects of market volatilities on Sage Group and Jadestone Energy 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 Jadestone Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sage Group and Jadestone Energy.
Diversification Opportunities for Sage Group and Jadestone Energy
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Sage and Jadestone is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Sage Group PLC and Jadestone Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jadestone Energy 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 Jadestone Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jadestone Energy has no effect on the direction of Sage Group i.e., Sage Group and Jadestone Energy go up and down completely randomly.
Pair Corralation between Sage Group and Jadestone Energy
Assuming the 90 days trading horizon Sage Group PLC is expected to generate 0.42 times more return on investment than Jadestone Energy. However, Sage Group PLC is 2.37 times less risky than Jadestone Energy. It trades about 0.08 of its potential returns per unit of risk. Jadestone Energy is currently generating about -0.05 per unit of risk. If you would invest 73,710 in Sage Group PLC on November 2, 2024 and sell it today you would earn a total of 59,190 from holding Sage Group PLC or generate 80.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 91.77% |
| Values | Daily Returns |
Sage Group PLC vs. Jadestone Energy
Performance |
| Timeline |
| Sage Group PLC |
| Jadestone Energy |
Sage Group and Jadestone Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sage Group and Jadestone Energy
The main advantage of trading using opposite Sage Group and Jadestone Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sage Group position performs unexpectedly, Jadestone Energy 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 Jadestone Energy will offset losses from the drop in Jadestone Energy's long position.| Sage Group vs. Broadcom | Sage Group vs. Blackrock World Mining | Sage Group vs. Kaufman Et Broad | Sage Group vs. Air Products Chemicals |
| Jadestone Energy vs. DXC Technology Co | Jadestone Energy vs. Cognizant Technology Solutions | Jadestone Energy vs. Micron Technology | Jadestone Energy vs. International Biotechnology Trust |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
Other Complementary Tools
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals |