Correlation Between SAG Holdings and SES AI

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

By analyzing existing cross correlation between SAG Holdings Limited and SES AI Corp, you can compare the effects of market volatilities on SAG Holdings and SES AI 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 SAG Holdings with a short position of SES AI. Check out your portfolio center. Please also check ongoing floating volatility patterns of SAG Holdings and SES AI.

Diversification Opportunities for SAG Holdings and SES AI

-0.01

Correlation Coefficient

SAG Holdings  SES AI

Good diversification

The 3 months correlation between SAG and SES is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding SAG Holdings Limited and SES AI Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SES AI Corp and SAG Holdings 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 SAG Holdings Limited are associated (or correlated) with SES AI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SES AI Corp has no effect on the direction of SAG Holdings i.e., SAG Holdings and SES AI go up and down completely randomly.

Pair Corralation between SAG Holdings and SES AI

Considering the 90-day investment horizon SAG Holdings Limited is expected to under-perform the SES AI. But the stock apears to be less risky and, when comparing its historical volatility, SAG Holdings Limited is 2.58 times less risky than SES AI. The stock trades about -0.2 of its potential returns per unit of risk. The SES AI Corp is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  60.00  in SES AI Corp on October 6, 2024 and sell it today you would earn a total of  165.00  from holding SES AI Corp or generate 275.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	80.65%
Values	Daily Returns

SAG Holdings Limited  vs.  SES AI Corp

SAG Holdings Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SAG Holdings Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite abnormal performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

SES AI Corp

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SES AI Corp are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical and fundamental indicators, SES AI unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SAG Holdings and SES AI

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

The idea behind SAG Holdings Limited and SES AI Corp 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.