Correlation Between Strategic Asset and General Money
Can any of the company-specific risk be diversified away by investing in both Strategic Asset and General Money 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 Strategic Asset and General Money into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Strategic Asset Management and General Money Market, you can compare the effects of market volatilities on Strategic Asset and General Money 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 Strategic Asset with a short position of General Money. Check out your portfolio center. Please also check ongoing floating volatility patterns of Strategic Asset and General Money.
Diversification Opportunities for Strategic Asset and General Money
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Strategic and General is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Strategic Asset Management and General Money Market in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on General Money Market and Strategic Asset 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 Strategic Asset Management are associated (or correlated) with General Money. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of General Money Market has no effect on the direction of Strategic Asset i.e., Strategic Asset and General Money go up and down completely randomly.
Pair Corralation between Strategic Asset and General Money
Assuming the 90 days horizon Strategic Asset Management is expected to generate 2.71 times more return on investment than General Money. However, Strategic Asset is 2.71 times more volatile than General Money Market. It trades about 0.1 of its potential returns per unit of risk. General Money Market is currently generating about 0.08 per unit of risk. If you would invest 1,624 in Strategic Asset Management on September 12, 2024 and sell it today you would earn a total of 403.00 from holding Strategic Asset Management or generate 24.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.6% |
| Values | Daily Returns |
Strategic Asset Management vs. General Money Market
Performance |
| Timeline |
| Strategic Asset Mana |
| General Money Market |
Strategic Asset and General Money Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Strategic Asset and General Money
The main advantage of trading using opposite Strategic Asset and General Money positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Strategic Asset position performs unexpectedly, General Money 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 General Money will offset losses from the drop in General Money's long position.| Strategic Asset vs. General Money Market | Strategic Asset vs. Ab Government Exchange | Strategic Asset vs. John Hancock Money | Strategic Asset vs. Hewitt Money Market |
| General Money vs. T Rowe Price | General Money vs. Multisector Bond Sma | General Money vs. Ambrus Core Bond | General Money vs. Blrc Sgy Mnp |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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