Correlation Between Saker Aviation and SATS

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Can any of the company-specific risk be diversified away by investing in both Saker Aviation and SATS 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 Saker Aviation and SATS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Saker Aviation Services and SATS, you can compare the effects of market volatilities on Saker Aviation and SATS 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 Saker Aviation with a short position of SATS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saker Aviation and SATS.

Diversification Opportunities for Saker Aviation and SATS

0.02
  Correlation Coefficient

Significant diversification

The 3 months correlation between Saker and SATS is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Saker Aviation Services and SATS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SATS and Saker Aviation 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 Saker Aviation Services are associated (or correlated) with SATS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SATS has no effect on the direction of Saker Aviation i.e., Saker Aviation and SATS go up and down completely randomly.

Pair Corralation between Saker Aviation and SATS

Given the investment horizon of 90 days Saker Aviation Services is expected to generate 1.22 times more return on investment than SATS. However, Saker Aviation is 1.22 times more volatile than SATS. It trades about -0.06 of its potential returns per unit of risk. SATS is currently generating about -0.21 per unit of risk. If you would invest  860.00  in Saker Aviation Services on December 29, 2023 and sell it today you would lose (23.00) from holding Saker Aviation Services or give up 2.67% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy95.65%
ValuesDaily Returns

Saker Aviation Services  vs.  SATS

 Performance 
       Timeline  
Saker Aviation Services 

Risk-Adjusted Performance

4 of 100

 
Low
 
High
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Saker Aviation Services are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Saker Aviation may actually be approaching a critical reversion point that can send shares even higher in April 2024.
SATS 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days SATS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Saker Aviation and SATS Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Saker Aviation and SATS

The main advantage of trading using opposite Saker Aviation and SATS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saker Aviation position performs unexpectedly, SATS 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 SATS will offset losses from the drop in SATS's long position.
The idea behind Saker Aviation Services and SATS 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.

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