Correlation Between Aim Investment and Saat Defensive
Can any of the company-specific risk be diversified away by investing in both Aim Investment 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 Aim Investment and Saat Defensive into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aim Investment Secs and Saat Defensive Strategy, you can compare the effects of market volatilities on Aim Investment 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 Aim Investment with a short position of Saat Defensive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aim Investment and Saat Defensive.
Diversification Opportunities for Aim Investment and Saat Defensive
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Aim and Saat is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Aim Investment Secs 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 Aim Investment 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 Aim Investment Secs 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 Aim Investment i.e., Aim Investment and Saat Defensive go up and down completely randomly.
Pair Corralation between Aim Investment and Saat Defensive
Assuming the 90 days horizon Aim Investment is expected to generate 1.48 times less return on investment than Saat Defensive. In addition to that, Aim Investment is 2.03 times more volatile than Saat Defensive Strategy. It trades about 0.12 of its total potential returns per unit of risk. Saat Defensive Strategy is currently generating about 0.36 per unit of volatility. If you would invest 1,009 in Saat Defensive Strategy on August 30, 2024 and sell it today you would earn a total of 115.00 from holding Saat Defensive Strategy or generate 11.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aim Investment Secs vs. Saat Defensive Strategy
Performance |
| Timeline |
| Aim Investment Secs |
| Saat Defensive Strategy |
Aim Investment and Saat Defensive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aim Investment and Saat Defensive
The main advantage of trading using opposite Aim Investment and Saat Defensive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aim Investment 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.| Aim Investment vs. Ppm High Yield | Aim Investment vs. Pace High Yield | Aim Investment vs. Western Asset High | Aim Investment vs. Multimanager Lifestyle Aggressive |
| 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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