Correlation Between Stagwell and 049560AY1

Can any of the company-specific risk be diversified away by investing in both Stagwell and 049560AY1 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 Stagwell and 049560AY1 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Stagwell and ATO 575 15 OCT 52, you can compare the effects of market volatilities on Stagwell and 049560AY1 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 Stagwell with a short position of 049560AY1. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stagwell and 049560AY1.

Diversification Opportunities for Stagwell and 049560AY1

-0.48

Correlation Coefficient

Stagwell  049560AY1

Very good diversification

The 3 months correlation between Stagwell and 049560AY1 is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Stagwell and ATO 575 15 OCT 52 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATO 575 15 and Stagwell 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 Stagwell are associated (or correlated) with 049560AY1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATO 575 15 has no effect on the direction of Stagwell i.e., Stagwell and 049560AY1 go up and down completely randomly.

Pair Corralation between Stagwell and 049560AY1

Given the investment horizon of 90 days Stagwell is expected to generate 2.8 times more return on investment than 049560AY1. However, Stagwell is 2.8 times more volatile than ATO 575 15 OCT 52. It trades about -0.01 of its potential returns per unit of risk. ATO 575 15 OCT 52 is currently generating about -0.11 per unit of risk. If you would invest  722.00  in Stagwell on September 20, 2024 and sell it today you would lose (28.00) from holding Stagwell or give up 3.88% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	61.9%
Values	Daily Returns

Stagwell  vs.  ATO 575 15 OCT 52

Stagwell

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Stagwell has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable technical and fundamental indicators, Stagwell is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

ATO 575 15

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days ATO 575 15 OCT 52 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 049560AY1 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Stagwell and 049560AY1

The main advantage of trading using opposite Stagwell and 049560AY1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stagwell position performs unexpectedly, 049560AY1 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 049560AY1 will offset losses from the drop in 049560AY1's long position.

The idea behind Stagwell and ATO 575 15 OCT 52 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.