Correlation Between Saratoga Investment and Accretion Acquisition

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

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

Diversification Opportunities for Saratoga Investment and Accretion Acquisition

0.64

Correlation Coefficient

Saratoga Investment  Accretion Acquisition

Poor diversification

The 3 months correlation between Saratoga and Accretion is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Saratoga Investment Corp and Accretion Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Accretion Acquisition and Saratoga Investment 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 Saratoga Investment Corp are associated (or correlated) with Accretion Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Accretion Acquisition has no effect on the direction of Saratoga Investment i.e., Saratoga Investment and Accretion Acquisition go up and down completely randomly.

Pair Corralation between Saratoga Investment and Accretion Acquisition

Considering the 90-day investment horizon Saratoga Investment Corp is expected to generate 10.15 times more return on investment than Accretion Acquisition. However, Saratoga Investment is 10.15 times more volatile than Accretion Acquisition Corp. It trades about 0.03 of its potential returns per unit of risk. Accretion Acquisition Corp is currently generating about 0.17 per unit of risk. If you would invest  2,167  in Saratoga Investment Corp on October 6, 2024 and sell it today you would earn a total of  265.00  from holding Saratoga Investment Corp or generate 12.23% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	22.74%
Values	Daily Returns

Saratoga Investment Corp  vs.  Accretion Acquisition Corp

Saratoga Investment Corp

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Saratoga Investment Corp are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, Saratoga Investment may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Accretion Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Accretion Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Accretion Acquisition is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Saratoga Investment and Accretion Acquisition

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

The idea behind Saratoga Investment Corp and Accretion Acquisition 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.

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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.