Correlation Between Ab Small and Saat Defensive
Can any of the company-specific risk be diversified away by investing in both Ab Small 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 Ab Small and Saat Defensive into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Small Cap and Saat Defensive Strategy, you can compare the effects of market volatilities on Ab Small 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 Ab Small with a short position of Saat Defensive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Small and Saat Defensive.
Diversification Opportunities for Ab Small and Saat Defensive
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between QUAIX and Saat is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Ab Small Cap 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 Ab Small 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 Ab Small Cap 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 Ab Small i.e., Ab Small and Saat Defensive go up and down completely randomly.
Pair Corralation between Ab Small and Saat Defensive
Assuming the 90 days horizon Ab Small Cap is expected to generate 11.29 times more return on investment than Saat Defensive. However, Ab Small is 11.29 times more volatile than Saat Defensive Strategy. It trades about 0.11 of its potential returns per unit of risk. Saat Defensive Strategy is currently generating about 0.22 per unit of risk. If you would invest 6,529 in Ab Small Cap on September 1, 2024 and sell it today you would earn a total of 1,338 from holding Ab Small Cap or generate 20.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Ab Small Cap vs. Saat Defensive Strategy
Performance |
| Timeline |
| Ab Small Cap |
| Saat Defensive Strategy |
Ab Small and Saat Defensive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Small and Saat Defensive
The main advantage of trading using opposite Ab Small and Saat Defensive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Small 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.| Ab Small vs. Pgim Jennison Diversified | Ab Small vs. Oppenheimer International Diversified | Ab Small vs. Jhancock Diversified Macro | Ab Small vs. Sentinel Small Pany |
| Saat Defensive vs. Simt Mid Cap | Saat Defensive vs. Saat Tax Managed Aggressive | Saat Defensive vs. Sit Emerging Markets | Saat Defensive vs. Simt High Yield |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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