Correlation Between Saba Closed and Principal Active
Can any of the company-specific risk be diversified away by investing in both Saba Closed and Principal Active 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 Saba Closed and Principal Active into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Saba Closed End Funds and Principal Active High, you can compare the effects of market volatilities on Saba Closed and Principal Active 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 Saba Closed with a short position of Principal Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saba Closed and Principal Active.
Diversification Opportunities for Saba Closed and Principal Active
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Saba and Principal is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Saba Closed End Funds and Principal Active High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Principal Active High and Saba Closed 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 Saba Closed End Funds are associated (or correlated) with Principal Active. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Principal Active High has no effect on the direction of Saba Closed i.e., Saba Closed and Principal Active go up and down completely randomly.
Pair Corralation between Saba Closed and Principal Active
Given the investment horizon of 90 days Saba Closed End Funds is expected to generate 2.02 times more return on investment than Principal Active. However, Saba Closed is 2.02 times more volatile than Principal Active High. It trades about 0.12 of its potential returns per unit of risk. Principal Active High is currently generating about 0.13 per unit of risk. If you would invest 1,666 in Saba Closed End Funds on September 12, 2024 and sell it today you would earn a total of 583.00 from holding Saba Closed End Funds or generate 34.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.72% |
| Values | Daily Returns |
Saba Closed End Funds vs. Principal Active High
Performance |
| Timeline |
| Saba Closed End |
| Principal Active High |
Saba Closed and Principal Active Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Saba Closed and Principal Active
The main advantage of trading using opposite Saba Closed and Principal Active positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saba Closed position performs unexpectedly, Principal Active 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 Principal Active will offset losses from the drop in Principal Active's long position.| Saba Closed vs. FT Cboe Vest | Saba Closed vs. First Trust Exchange Traded | Saba Closed vs. FT Cboe Vest | Saba Closed vs. Anfield Equity Sector |
| Principal Active vs. SPDR SSgA Income | Principal Active vs. First Trust Income | Principal Active vs. Saba Closed End Funds | Principal Active vs. Xtrackers Short Duration |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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