Correlation Between SOVEREIGN TRUST and ACCESS HOLDINGS

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

By analyzing existing cross correlation between SOVEREIGN TRUST INSURANCE and ACCESS HOLDINGS PLC, you can compare the effects of market volatilities on SOVEREIGN TRUST and ACCESS HOLDINGS 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 SOVEREIGN TRUST with a short position of ACCESS HOLDINGS. Check out your portfolio center. Please also check ongoing floating volatility patterns of SOVEREIGN TRUST and ACCESS HOLDINGS.

Diversification Opportunities for SOVEREIGN TRUST and ACCESS HOLDINGS

0.0

Correlation Coefficient

SOVEREIGN TRUST  ACCESS HOLDINGS

Pay attention - limited upside

The 3 months correlation between SOVEREIGN and ACCESS is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SOVEREIGN TRUST INSURANCE and ACCESS HOLDINGS PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ACCESS HOLDINGS PLC and SOVEREIGN TRUST 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 SOVEREIGN TRUST INSURANCE are associated (or correlated) with ACCESS HOLDINGS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ACCESS HOLDINGS PLC has no effect on the direction of SOVEREIGN TRUST i.e., SOVEREIGN TRUST and ACCESS HOLDINGS go up and down completely randomly.

Pair Corralation between SOVEREIGN TRUST and ACCESS HOLDINGS

If you would invest  63.00  in SOVEREIGN TRUST INSURANCE on September 12, 2024 and sell it today you would earn a total of  23.00  from holding SOVEREIGN TRUST INSURANCE or generate 36.51% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.61%
Values	Daily Returns

SOVEREIGN TRUST INSURANCE  vs.  ACCESS HOLDINGS PLC

SOVEREIGN TRUST INSURANCE

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SOVEREIGN TRUST INSURANCE are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady basic indicators, SOVEREIGN TRUST demonstrated solid returns over the last few months and may actually be approaching a breakup point.

ACCESS HOLDINGS PLC

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days ACCESS HOLDINGS PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, ACCESS HOLDINGS is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with SOVEREIGN TRUST and ACCESS HOLDINGS

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

The idea behind SOVEREIGN TRUST INSURANCE and ACCESS HOLDINGS 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.