Correlation Between Strategic Asset and Smallcap Fund
Can any of the company-specific risk be diversified away by investing in both Strategic Asset and Smallcap Fund 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 Smallcap Fund 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 Smallcap Fund Fka, you can compare the effects of market volatilities on Strategic Asset and Smallcap Fund 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 Smallcap Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Strategic Asset and Smallcap Fund.
Diversification Opportunities for Strategic Asset and Smallcap Fund
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Strategic and Smallcap is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Strategic Asset Management and Smallcap Fund Fka in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Smallcap Fund Fka 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 Smallcap Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Smallcap Fund Fka has no effect on the direction of Strategic Asset i.e., Strategic Asset and Smallcap Fund go up and down completely randomly.
Pair Corralation between Strategic Asset and Smallcap Fund
Assuming the 90 days horizon Strategic Asset Management is expected to generate 0.32 times more return on investment than Smallcap Fund. However, Strategic Asset Management is 3.15 times less risky than Smallcap Fund. It trades about -0.38 of its potential returns per unit of risk. Smallcap Fund Fka is currently generating about -0.23 per unit of risk. If you would invest 1,232 in Strategic Asset Management on October 11, 2024 and sell it today you would lose (39.00) from holding Strategic Asset Management or give up 3.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Strategic Asset Management vs. Smallcap Fund Fka
Performance |
| Timeline |
| Strategic Asset Mana |
| Smallcap Fund Fka |
Strategic Asset and Smallcap Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Strategic Asset and Smallcap Fund
The main advantage of trading using opposite Strategic Asset and Smallcap Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Strategic Asset position performs unexpectedly, Smallcap Fund 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 Smallcap Fund will offset losses from the drop in Smallcap Fund's long position.| Strategic Asset vs. Nuveen Short Term | Strategic Asset vs. Angel Oak Ultrashort | Strategic Asset vs. Rbc Short Duration | Strategic Asset vs. Cmg Ultra Short |
| Smallcap Fund vs. Franklin Small Cap | Smallcap Fund vs. Small Pany Growth | Smallcap Fund vs. Praxis Small Cap | Smallcap Fund vs. Glg Intl Small |
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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