Correlation Between American Balanced and Saat Market
Can any of the company-specific risk be diversified away by investing in both American Balanced and Saat Market 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 American Balanced and Saat Market into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Balanced and Saat Market Growth, you can compare the effects of market volatilities on American Balanced and Saat Market 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 American Balanced with a short position of Saat Market. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Balanced and Saat Market.
Diversification Opportunities for American Balanced and Saat Market
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between American and Saat is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding American Balanced and Saat Market Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saat Market Growth and American Balanced 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 American Balanced are associated (or correlated) with Saat Market. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saat Market Growth has no effect on the direction of American Balanced i.e., American Balanced and Saat Market go up and down completely randomly.
Pair Corralation between American Balanced and Saat Market
Assuming the 90 days horizon American Balanced is expected to generate 1.31 times more return on investment than Saat Market. However, American Balanced is 1.31 times more volatile than Saat Market Growth. It trades about 0.13 of its potential returns per unit of risk. Saat Market Growth is currently generating about 0.15 per unit of risk. If you would invest 3,624 in American Balanced on August 28, 2024 and sell it today you would earn a total of 52.00 from holding American Balanced or generate 1.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
American Balanced vs. Saat Market Growth
Performance |
| Timeline |
| American Balanced |
| Saat Market Growth |
American Balanced and Saat Market Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Balanced and Saat Market
The main advantage of trading using opposite American Balanced and Saat Market positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Balanced position performs unexpectedly, Saat Market 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 Saat Market will offset losses from the drop in Saat Market's long position.| American Balanced vs. Income Fund Of | American Balanced vs. Capital Income Builder | American Balanced vs. Capital World Growth | American Balanced vs. Growth Fund Of |
| Saat Market vs. Simt Multi Asset Accumulation | Saat Market vs. Simt Real Return | Saat Market vs. Simt Small Cap | Saat Market vs. Siit Screened World |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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