Correlation Between Strategic Asset and Government Securities
Can any of the company-specific risk be diversified away by investing in both Strategic Asset and Government Securities 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 Government Securities 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 Government Securities Fund, you can compare the effects of market volatilities on Strategic Asset and Government Securities 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 Government Securities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Strategic Asset and Government Securities.
Diversification Opportunities for Strategic Asset and Government Securities
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Strategic and Government is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Strategic Asset Management and Government Securities Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Government Securities 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 Government Securities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Government Securities has no effect on the direction of Strategic Asset i.e., Strategic Asset and Government Securities go up and down completely randomly.
Pair Corralation between Strategic Asset and Government Securities
Assuming the 90 days horizon Strategic Asset is expected to generate 1.49 times less return on investment than Government Securities. In addition to that, Strategic Asset is 1.09 times more volatile than Government Securities Fund. It trades about 0.17 of its total potential returns per unit of risk. Government Securities Fund is currently generating about 0.28 per unit of volatility. If you would invest 873.00 in Government Securities Fund on November 28, 2024 and sell it today you would earn a total of 13.00 from holding Government Securities Fund or generate 1.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Strategic Asset Management vs. Government Securities Fund
Performance |
| Timeline |
| Strategic Asset Mana |
| Government Securities |
Strategic Asset and Government Securities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Strategic Asset and Government Securities
The main advantage of trading using opposite Strategic Asset and Government Securities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Strategic Asset position performs unexpectedly, Government Securities 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 Government Securities will offset losses from the drop in Government Securities' long position.| Strategic Asset vs. Small Pany Growth | Strategic Asset vs. Victory Incore Fund | Strategic Asset vs. Rbb Fund | Strategic Asset vs. Rbc Emerging Markets |
| Government Securities vs. T Rowe Price | Government Securities vs. Prudential Emerging Markets | Government Securities vs. Collegeadvantage 529 Savings | Government Securities vs. Hsbc Funds |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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