Correlation Between Exel Composites and Saga Furs

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

By analyzing existing cross correlation between Exel Composites Oyj and Saga Furs Oyj, you can compare the effects of market volatilities on Exel Composites and Saga Furs 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 Exel Composites with a short position of Saga Furs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exel Composites and Saga Furs.

Diversification Opportunities for Exel Composites and Saga Furs

0.43

Correlation Coefficient

Exel Composites  Saga Furs

Very weak diversification

The 3 months correlation between Exel and Saga is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Exel Composites Oyj and Saga Furs Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saga Furs Oyj and Exel Composites 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 Exel Composites Oyj are associated (or correlated) with Saga Furs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saga Furs Oyj has no effect on the direction of Exel Composites i.e., Exel Composites and Saga Furs go up and down completely randomly.

Pair Corralation between Exel Composites and Saga Furs

Assuming the 90 days trading horizon Exel Composites Oyj is expected to under-perform the Saga Furs. In addition to that, Exel Composites is 1.0 times more volatile than Saga Furs Oyj. It trades about -0.11 of its total potential returns per unit of risk. Saga Furs Oyj is currently generating about 0.0 per unit of volatility. If you would invest  870.00  in Saga Furs Oyj on October 5, 2024 and sell it today you would lose (5.00) from holding Saga Furs Oyj or give up 0.57% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Exel Composites Oyj  vs.  Saga Furs Oyj

Exel Composites Oyj

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Exel Composites Oyj has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's technical indicators remain fairly strong which may send shares a bit higher in February 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Saga Furs Oyj

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Saga Furs Oyj has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's technical indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with Exel Composites and Saga Furs

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

The idea behind Exel Composites Oyj and Saga Furs Oyj 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.