Correlation Between Savi Financial and Oconee Financial

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

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

Diversification Opportunities for Savi Financial and Oconee Financial

0.78

Correlation Coefficient

Savi Financial  Oconee Financial

Poor diversification

The 3 months correlation between Savi and Oconee is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Savi Financial and Oconee Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oconee Financial and Savi Financial 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 Savi Financial are associated (or correlated) with Oconee Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oconee Financial has no effect on the direction of Savi Financial i.e., Savi Financial and Oconee Financial go up and down completely randomly.

Pair Corralation between Savi Financial and Oconee Financial

Given the investment horizon of 90 days Savi Financial is expected to generate 3.54 times less return on investment than Oconee Financial. But when comparing it to its historical volatility, Savi Financial is 3.65 times less risky than Oconee Financial. It trades about 0.1 of its potential returns per unit of risk. Oconee Financial is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  3,906  in Oconee Financial on October 11, 2024 and sell it today you would earn a total of  45.00  from holding Oconee Financial or generate 1.15% return on investment over 90 days.

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

Savi Financial  vs.  Oconee Financial

Savi Financial

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Savi Financial are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Savi Financial is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Oconee Financial

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Oconee Financial are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent fundamental drivers, Oconee Financial is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Savi Financial and Oconee Financial

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

The idea behind Savi Financial and Oconee Financial 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.