Correlation Between Sage Group and Atalaya Mining

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

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

Diversification Opportunities for Sage Group and Atalaya Mining

-0.44

Correlation Coefficient

Sage Group  Atalaya Mining

Very good diversification

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

Pair Corralation between Sage Group and Atalaya Mining

Assuming the 90 days trading horizon Sage Group PLC is expected to generate 1.2 times more return on investment than Atalaya Mining. However, Sage Group is 1.2 times more volatile than Atalaya Mining. It trades about 0.17 of its potential returns per unit of risk. Atalaya Mining is currently generating about -0.07 per unit of risk. If you would invest  100,150  in Sage Group PLC on October 7, 2024 and sell it today you would earn a total of  27,700  from holding Sage Group PLC or generate 27.66% return on investment over 90 days.

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

Sage Group PLC  vs.  Atalaya Mining

Sage Group PLC

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sage Group PLC are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Sage Group exhibited solid returns over the last few months and may actually be approaching a breakup point.

Atalaya Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Atalaya Mining has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Sage Group and Atalaya Mining

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

The idea behind Sage Group PLC and Atalaya Mining 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.