Correlation Between Catholic Values and Saat Defensive
Can any of the company-specific risk be diversified away by investing in both Catholic Values and Saat Defensive 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 Catholic Values and Saat Defensive into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Catholic Values Fixed and Saat Defensive Strategy, you can compare the effects of market volatilities on Catholic Values and Saat Defensive 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 Catholic Values with a short position of Saat Defensive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catholic Values and Saat Defensive.
Diversification Opportunities for Catholic Values and Saat Defensive
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Catholic and Saat is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Catholic Values Fixed and Saat Defensive Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saat Defensive Strategy and Catholic Values 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 Catholic Values Fixed are associated (or correlated) with Saat Defensive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saat Defensive Strategy has no effect on the direction of Catholic Values i.e., Catholic Values and Saat Defensive go up and down completely randomly.
Pair Corralation between Catholic Values and Saat Defensive
Assuming the 90 days horizon Catholic Values is expected to generate 1.73 times less return on investment than Saat Defensive. In addition to that, Catholic Values is 7.16 times more volatile than Saat Defensive Strategy. It trades about 0.03 of its total potential returns per unit of risk. Saat Defensive Strategy is currently generating about 0.39 per unit of volatility. If you would invest 1,032 in Saat Defensive Strategy on August 31, 2024 and sell it today you would earn a total of 92.00 from holding Saat Defensive Strategy or generate 8.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Catholic Values Fixed vs. Saat Defensive Strategy
Performance |
| Timeline |
| Catholic Values Fixed |
| Saat Defensive Strategy |
Catholic Values and Saat Defensive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catholic Values and Saat Defensive
The main advantage of trading using opposite Catholic Values and Saat Defensive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catholic Values position performs unexpectedly, Saat Defensive 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 Defensive will offset losses from the drop in Saat Defensive's long position.The idea behind Catholic Values Fixed and Saat Defensive Strategy 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.
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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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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