Correlation Between Commonwealth Global and Saat Defensive
Can any of the company-specific risk be diversified away by investing in both Commonwealth Global 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 Commonwealth Global and Saat Defensive into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Commonwealth Global Fund and Saat Defensive Strategy, you can compare the effects of market volatilities on Commonwealth Global 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 Commonwealth Global with a short position of Saat Defensive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Commonwealth Global and Saat Defensive.
Diversification Opportunities for Commonwealth Global and Saat Defensive
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Commonwealth and Saat is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Commonwealth Global Fund 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 Commonwealth Global 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 Commonwealth Global Fund 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 Commonwealth Global i.e., Commonwealth Global and Saat Defensive go up and down completely randomly.
Pair Corralation between Commonwealth Global and Saat Defensive
Assuming the 90 days horizon Commonwealth Global Fund is expected to generate 12.59 times more return on investment than Saat Defensive. However, Commonwealth Global is 12.59 times more volatile than Saat Defensive Strategy. It trades about 0.06 of its potential returns per unit of risk. Saat Defensive Strategy is currently generating about 0.36 per unit of risk. If you would invest 1,777 in Commonwealth Global Fund on August 30, 2024 and sell it today you would earn a total of 385.00 from holding Commonwealth Global Fund or generate 21.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Commonwealth Global Fund vs. Saat Defensive Strategy
Performance |
| Timeline |
| Commonwealth Global |
| Saat Defensive Strategy |
Commonwealth Global and Saat Defensive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Commonwealth Global and Saat Defensive
The main advantage of trading using opposite Commonwealth Global and Saat Defensive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Commonwealth Global 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.| Commonwealth Global vs. Commonwealth Australianew Zealand | Commonwealth Global vs. Commonwealth Japan Fund | Commonwealth Global vs. Commonwealth Real Estate | Commonwealth Global vs. HUMANA INC |
| Saat Defensive vs. Morgan Stanley Global | Saat Defensive vs. Commonwealth Global Fund | Saat Defensive vs. Wasatch Global Opportunities | Saat Defensive vs. Massmutual Premier Global |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
Other Complementary Tools
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |