Correlation Between Sage Group and Farmers Edge
Can any of the company-specific risk be diversified away by investing in both Sage Group and Farmers Edge 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 Farmers Edge 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 Farmers Edge, you can compare the effects of market volatilities on Sage Group and Farmers Edge 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 Farmers Edge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sage Group and Farmers Edge.
Diversification Opportunities for Sage Group and Farmers Edge
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Sage and Farmers is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Sage Group PLC and Farmers Edge in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Farmers Edge 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 Farmers Edge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Farmers Edge has no effect on the direction of Sage Group i.e., Sage Group and Farmers Edge go up and down completely randomly.
Pair Corralation between Sage Group and Farmers Edge
If you would invest 5,516 in Sage Group PLC on August 25, 2024 and sell it today you would earn a total of 905.00 from holding Sage Group PLC or generate 16.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 2.22% |
| Values | Daily Returns |
Sage Group PLC vs. Farmers Edge
Performance |
| Timeline |
| Sage Group PLC |
| Farmers Edge |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Sage Group and Farmers Edge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sage Group and Farmers Edge
The main advantage of trading using opposite Sage Group and Farmers Edge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sage Group position performs unexpectedly, Farmers Edge 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 Farmers Edge will offset losses from the drop in Farmers Edge's long position.| Sage Group vs. Salesforce | Sage Group vs. SAP SE ADR | Sage Group vs. ServiceNow | Sage Group vs. Intuit Inc |
| Farmers Edge vs. RenoWorks Software | Farmers Edge vs. 01 Communique Laboratory | Farmers Edge vs. RESAAS Services | Farmers Edge vs. LifeSpeak |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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