Correlation Between Sage Group and Persimmon Plc
Can any of the company-specific risk be diversified away by investing in both Sage Group and Persimmon Plc 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 Persimmon Plc 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 Persimmon Plc, you can compare the effects of market volatilities on Sage Group and Persimmon Plc 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 Persimmon Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sage Group and Persimmon Plc.
Diversification Opportunities for Sage Group and Persimmon Plc
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sage and Persimmon is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Sage Group PLC and Persimmon Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Persimmon Plc 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 Persimmon Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Persimmon Plc has no effect on the direction of Sage Group i.e., Sage Group and Persimmon Plc go up and down completely randomly.
Pair Corralation between Sage Group and Persimmon Plc
Assuming the 90 days horizon Sage Group PLC is expected to generate 1.62 times more return on investment than Persimmon Plc. However, Sage Group is 1.62 times more volatile than Persimmon Plc. It trades about 0.26 of its potential returns per unit of risk. Persimmon Plc is currently generating about -0.5 per unit of risk. If you would invest 5,262 in Sage Group PLC on August 27, 2024 and sell it today you would earn a total of 1,232 from holding Sage Group PLC or generate 23.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sage Group PLC vs. Persimmon Plc
Performance |
| Timeline |
| Sage Group PLC |
| Persimmon Plc |
Sage Group and Persimmon Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sage Group and Persimmon Plc
The main advantage of trading using opposite Sage Group and Persimmon Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sage Group position performs unexpectedly, Persimmon Plc 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 Persimmon Plc will offset losses from the drop in Persimmon Plc's long position.| Sage Group vs. Salesforce | Sage Group vs. SAP SE ADR | Sage Group vs. ServiceNow | Sage Group vs. Intuit Inc |
| Persimmon Plc vs. Greystone Logistics | Persimmon Plc vs. Mill City Ventures | Persimmon Plc vs. Barksdale Resources Corp | Persimmon Plc vs. Black Diamond Group |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings |