Correlation Between Sage Potash and Mccoy Global

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

By analyzing existing cross correlation between Sage Potash Corp and Mccoy Global, you can compare the effects of market volatilities on Sage Potash and Mccoy Global 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 Potash with a short position of Mccoy Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sage Potash and Mccoy Global.

Diversification Opportunities for Sage Potash and Mccoy Global

-0.44

Correlation Coefficient

Sage Potash  Mccoy Global

Very good diversification

The 3 months correlation between Sage and Mccoy is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Sage Potash Corp and Mccoy Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mccoy Global and Sage Potash 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 Potash Corp are associated (or correlated) with Mccoy Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mccoy Global has no effect on the direction of Sage Potash i.e., Sage Potash and Mccoy Global go up and down completely randomly.

Pair Corralation between Sage Potash and Mccoy Global

Assuming the 90 days trading horizon Sage Potash is expected to generate 8.17 times less return on investment than Mccoy Global. In addition to that, Sage Potash is 1.82 times more volatile than Mccoy Global. It trades about 0.01 of its total potential returns per unit of risk. Mccoy Global is currently generating about 0.18 per unit of volatility. If you would invest  198.00  in Mccoy Global on September 5, 2024 and sell it today you would earn a total of  88.00  from holding Mccoy Global or generate 44.44% return on investment over 90 days.

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

Sage Potash Corp  vs.  Mccoy Global

Sage Potash Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sage Potash Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable technical and fundamental indicators, Sage Potash is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Mccoy Global

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Mccoy Global are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental drivers, Mccoy Global displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sage Potash and Mccoy Global

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

The idea behind Sage Potash Corp and Mccoy Global 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.