Correlation Between Sage Group and Intuitive Investments

Can any of the company-specific risk be diversified away by investing in both Sage Group and Intuitive Investments 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 Intuitive Investments 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 Intuitive Investments Group, you can compare the effects of market volatilities on Sage Group and Intuitive Investments 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 Intuitive Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sage Group and Intuitive Investments.

Diversification Opportunities for Sage Group and Intuitive Investments

-0.46

Correlation Coefficient

Sage Group  Intuitive Investments

Very good diversification

The 3 months correlation between Sage and Intuitive is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Sage Group PLC and Intuitive Investments Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intuitive Investments 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 Intuitive Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intuitive Investments has no effect on the direction of Sage Group i.e., Sage Group and Intuitive Investments go up and down completely randomly.

Pair Corralation between Sage Group and Intuitive Investments

Assuming the 90 days trading horizon Sage Group PLC is expected to under-perform the Intuitive Investments. But the stock apears to be less risky and, when comparing its historical volatility, Sage Group PLC is 5.15 times less risky than Intuitive Investments. The stock trades about -0.16 of its potential returns per unit of risk. The Intuitive Investments Group is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  12,450  in Intuitive Investments Group on October 6, 2024 and sell it today you would earn a total of  350.00  from holding Intuitive Investments Group or generate 2.81% 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.  Intuitive Investments Group

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 uncertain technical and fundamental indicators, Sage Group exhibited solid returns over the last few months and may actually be approaching a breakup point.

Intuitive Investments

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Intuitive Investments Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Intuitive Investments is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Sage Group and Intuitive Investments

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

The idea behind Sage Group PLC and Intuitive Investments Group 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.