Correlation Between Tegna and Saga Communications

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

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

Diversification Opportunities for Tegna and Saga Communications

0.3

Correlation Coefficient

Tegna  Saga Communications

Weak diversification

The 3 months correlation between Tegna and Saga is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Tegna Inc and Saga Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saga Communications and Tegna 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 Tegna Inc are associated (or correlated) with Saga Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saga Communications has no effect on the direction of Tegna i.e., Tegna and Saga Communications go up and down completely randomly.

Pair Corralation between Tegna and Saga Communications

Given the investment horizon of 90 days Tegna is expected to generate 2.93 times less return on investment than Saga Communications. But when comparing it to its historical volatility, Tegna Inc is 1.39 times less risky than Saga Communications. It trades about 0.04 of its potential returns per unit of risk. Saga Communications is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  1,145  in Saga Communications on December 26, 2024 and sell it today you would earn a total of  110.00  from holding Saga Communications or generate 9.61% return on investment over 90 days.

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

Tegna Inc  vs.  Saga Communications

Tegna Inc

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Tegna Inc are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Tegna is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Saga Communications

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Saga Communications are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak technical and fundamental indicators, Saga Communications may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Tegna and Saga Communications

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

The idea behind Tegna Inc and Saga Communications 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.