Correlation Between Stagwell and Abits
Can any of the company-specific risk be diversified away by investing in both Stagwell and Abits 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 Stagwell and Abits into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stagwell and Abits Group, you can compare the effects of market volatilities on Stagwell and Abits 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 Stagwell with a short position of Abits. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stagwell and Abits.
Diversification Opportunities for Stagwell and Abits
Very weak diversification
The 3 months correlation between Stagwell and Abits is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Stagwell and Abits Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Abits Group and Stagwell 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 Stagwell are associated (or correlated) with Abits. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Abits Group has no effect on the direction of Stagwell i.e., Stagwell and Abits go up and down completely randomly.
Pair Corralation between Stagwell and Abits
Given the investment horizon of 90 days Stagwell is expected to generate 2.83 times less return on investment than Abits. But when comparing it to its historical volatility, Stagwell is 2.73 times less risky than Abits. It trades about 0.11 of its potential returns per unit of risk. Abits Group is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 50.00 in Abits Group on August 26, 2024 and sell it today you would earn a total of 13.00 from holding Abits Group or generate 26.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stagwell vs. Abits Group
Performance |
| Timeline |
| Stagwell |
| Abits Group |
Stagwell and Abits Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stagwell and Abits
The main advantage of trading using opposite Stagwell and Abits positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stagwell position performs unexpectedly, Abits 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 Abits will offset losses from the drop in Abits' long position.| Stagwell vs. Innovid Corp | Stagwell vs. Interpublic Group of | Stagwell vs. Cimpress NV | Stagwell vs. Criteo Sa |
| Abits vs. Harmony Gold Mining | Abits vs. Entravision Communications | Abits vs. Stagwell | Abits vs. BOS Better Online |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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