Correlation Between Saga Communications and E W

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

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

Diversification Opportunities for Saga Communications and E W

0.32

Correlation Coefficient

Saga Communications  E W

Weak diversification

The 3 months correlation between Saga and SSP is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Saga Communications and E W Scripps in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on E W Scripps and Saga Communications 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 Saga Communications are associated (or correlated) with E W. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of E W Scripps has no effect on the direction of Saga Communications i.e., Saga Communications and E W go up and down completely randomly.

Pair Corralation between Saga Communications and E W

Considering the 90-day investment horizon Saga Communications is expected to under-perform the E W. But the stock apears to be less risky and, when comparing its historical volatility, Saga Communications is 1.93 times less risky than E W. The stock trades about -0.21 of its potential returns per unit of risk. The E W Scripps is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  227.00  in E W Scripps on September 5, 2024 and sell it today you would lose (12.00) from holding E W Scripps or give up 5.29% of portfolio value over 90 days.

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

Saga Communications  vs.  E W Scripps

Saga Communications

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Saga Communications has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical and fundamental indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

E W Scripps

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in E W Scripps are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent basic indicators, E W reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Saga Communications and E W

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

The idea behind Saga Communications and E W Scripps 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.