Correlation Between Savaria and Stingray

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

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

Diversification Opportunities for Savaria and Stingray

-0.77

Correlation Coefficient

Savaria  Stingray

Pay attention - limited upside

The 3 months correlation between Savaria and Stingray is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Savaria and Stingray Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stingray Group and Savaria 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 Savaria are associated (or correlated) with Stingray. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stingray Group has no effect on the direction of Savaria i.e., Savaria and Stingray go up and down completely randomly.

Pair Corralation between Savaria and Stingray

Assuming the 90 days trading horizon Savaria is expected to under-perform the Stingray. But the stock apears to be less risky and, when comparing its historical volatility, Savaria is 2.27 times less risky than Stingray. The stock trades about -0.21 of its potential returns per unit of risk. The Stingray Group is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  802.00  in Stingray Group on December 5, 2024 and sell it today you would earn a total of  61.00  from holding Stingray Group or generate 7.61% return on investment over 90 days.

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

Savaria  vs.  Stingray Group

Savaria

Risk-Adjusted Performance

Very Weak

Over the last 90 days Savaria has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Stingray Group

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Stingray Group are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Stingray may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Savaria and Stingray

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

The idea behind Savaria and Stingray 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.

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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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.