Correlation Between NYSE Composite and Saat Defensive
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and Saat Defensive into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Saat Defensive Strategy, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of Saat Defensive. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Saat Defensive.
Diversification Opportunities for NYSE Composite and Saat Defensive
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between NYSE and Saat is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite 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 NYSE Composite 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 NYSE Composite 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 NYSE Composite i.e., NYSE Composite and Saat Defensive go up and down completely randomly.
Pair Corralation between NYSE Composite and Saat Defensive
Assuming the 90 days trading horizon NYSE Composite is expected to generate 14.1 times more return on investment than Saat Defensive. However, NYSE Composite is 14.1 times more volatile than Saat Defensive Strategy. It trades about 0.14 of its potential returns per unit of risk. Saat Defensive Strategy is currently generating about 0.48 per unit of risk. If you would invest 1,800,696 in NYSE Composite on September 1, 2024 and sell it today you would earn a total of 226,508 from holding NYSE Composite or generate 12.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.21% |
| Values | Daily Returns |
NYSE Composite vs. Saat Defensive Strategy
Performance |
| Timeline |
NYSE Composite and Saat Defensive Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Saat Defensive Strategy
Pair trading matchups for Saat Defensive
Pair Trading with NYSE Composite and Saat Defensive
The main advantage of trading using opposite NYSE Composite and Saat Defensive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Acumen Pharmaceuticals | NYSE Composite vs. Mind Medicine | NYSE Composite vs. NL Industries | NYSE Composite vs. Ecovyst |
| Saat Defensive vs. Fidelity Small Cap | Saat Defensive vs. Royce Opportunity Fund | Saat Defensive vs. Vanguard Small Cap Value | Saat Defensive vs. Heartland Value Plus |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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