Correlation Between Sage Group and RESAAS Services
Can any of the company-specific risk be diversified away by investing in both Sage Group and RESAAS Services 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 RESAAS Services 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 RESAAS Services, you can compare the effects of market volatilities on Sage Group and RESAAS Services 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 RESAAS Services. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sage Group and RESAAS Services.
Diversification Opportunities for Sage Group and RESAAS Services
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sage and RESAAS is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Sage Group PLC and RESAAS Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RESAAS Services 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 RESAAS Services. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RESAAS Services has no effect on the direction of Sage Group i.e., Sage Group and RESAAS Services go up and down completely randomly.
Pair Corralation between Sage Group and RESAAS Services
Assuming the 90 days horizon Sage Group PLC is expected to generate 0.5 times more return on investment than RESAAS Services. However, Sage Group PLC is 2.01 times less risky than RESAAS Services. It trades about 0.26 of its potential returns per unit of risk. RESAAS Services is currently generating about -0.04 per unit of risk. If you would invest 5,262 in Sage Group PLC on August 29, 2024 and sell it today you would earn a total of 1,289 from holding Sage Group PLC or generate 24.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Sage Group PLC vs. RESAAS Services
Performance |
| Timeline |
| Sage Group PLC |
| RESAAS Services |
Sage Group and RESAAS Services Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sage Group and RESAAS Services
The main advantage of trading using opposite Sage Group and RESAAS Services positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sage Group position performs unexpectedly, RESAAS Services 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 RESAAS Services will offset losses from the drop in RESAAS Services' long position.| Sage Group vs. RenoWorks Software | Sage Group vs. LifeSpeak | Sage Group vs. 01 Communique Laboratory | Sage Group vs. RESAAS Services |
| RESAAS Services vs. Bank Rakyat | RESAAS Services vs. PT Bank Rakyat | RESAAS Services vs. Samsung Electronics Co | RESAAS Services vs. Bank Mandiri Persero |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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