Correlation Between Auburn National and Sadot

Can any of the company-specific risk be diversified away by investing in both Auburn National and Sadot 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 Auburn National and Sadot into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Auburn National Bancorporation and Sadot Group, you can compare the effects of market volatilities on Auburn National and Sadot 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 Auburn National with a short position of Sadot. Check out your portfolio center. Please also check ongoing floating volatility patterns of Auburn National and Sadot.

Diversification Opportunities for Auburn National and Sadot

0.61

Correlation Coefficient

Auburn National  Sadot

Poor diversification

The 3 months correlation between Auburn and Sadot is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Auburn National Bancorp. and Sadot Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sadot Group and Auburn National 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 Auburn National Bancorporation are associated (or correlated) with Sadot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sadot Group has no effect on the direction of Auburn National i.e., Auburn National and Sadot go up and down completely randomly.

Pair Corralation between Auburn National and Sadot

Given the investment horizon of 90 days Auburn National is expected to generate 14.54 times less return on investment than Sadot. But when comparing it to its historical volatility, Auburn National Bancorporation is 2.46 times less risky than Sadot. It trades about 0.04 of its potential returns per unit of risk. Sadot Group is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest  260.00  in Sadot Group on December 4, 2024 and sell it today you would earn a total of  56.00  from holding Sadot Group or generate 21.54% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.24%
Values	Daily Returns

Auburn National Bancorp.  vs.  Sadot Group

Auburn National Banc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Auburn National Bancorporation has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental drivers, Auburn National is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Sadot Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sadot Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Auburn National and Sadot

The main advantage of trading using opposite Auburn National and Sadot positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Auburn National position performs unexpectedly, Sadot 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 Sadot will offset losses from the drop in Sadot's long position.

The idea behind Auburn National Bancorporation and Sadot Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.