Correlation Between Invesco Physical and Sage Group

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

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

Diversification Opportunities for Invesco Physical and Sage Group

-0.71

Correlation Coefficient

Invesco Physical  Sage Group

Pay attention - limited upside

The 3 months correlation between Invesco and Sage is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Physical Silver and Sage Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sage Group PLC and Invesco Physical 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 Invesco Physical Silver are associated (or correlated) with Sage Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sage Group PLC has no effect on the direction of Invesco Physical i.e., Invesco Physical and Sage Group go up and down completely randomly.

Pair Corralation between Invesco Physical and Sage Group

Assuming the 90 days trading horizon Invesco Physical Silver is expected to under-perform the Sage Group. But the stock apears to be less risky and, when comparing its historical volatility, Invesco Physical Silver is 1.57 times less risky than Sage Group. The stock trades about -0.09 of its potential returns per unit of risk. The Sage Group PLC is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  101,045  in Sage Group PLC on October 24, 2024 and sell it today you would earn a total of  31,155  from holding Sage Group PLC or generate 30.83% return on investment over 90 days.

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

Invesco Physical Silver  vs.  Sage Group PLC

Invesco Physical Silver

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Invesco Physical Silver 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.

Sage Group PLC

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sage Group PLC are ranked lower than 14 (%) 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.

Pair Trading with Invesco Physical and Sage Group

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

The idea behind Invesco Physical Silver and Sage Group PLC 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.