Correlation Between Mid-cap 15x and Saat Defensive
Can any of the company-specific risk be diversified away by investing in both Mid-cap 15x 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 Mid-cap 15x and Saat Defensive into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mid Cap 15x Strategy and Saat Defensive Strategy, you can compare the effects of market volatilities on Mid-cap 15x 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 Mid-cap 15x with a short position of Saat Defensive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mid-cap 15x and Saat Defensive.
Diversification Opportunities for Mid-cap 15x and Saat Defensive
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mid-cap and Saat is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Mid Cap 15x Strategy 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 Mid-cap 15x 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 Mid Cap 15x Strategy 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 Mid-cap 15x i.e., Mid-cap 15x and Saat Defensive go up and down completely randomly.
Pair Corralation between Mid-cap 15x and Saat Defensive
Assuming the 90 days horizon Mid Cap 15x Strategy is expected to generate 11.5 times more return on investment than Saat Defensive. However, Mid-cap 15x is 11.5 times more volatile than Saat Defensive Strategy. It trades about 0.06 of its potential returns per unit of risk. Saat Defensive Strategy is currently generating about 0.16 per unit of risk. If you would invest 11,229 in Mid Cap 15x Strategy on November 3, 2024 and sell it today you would earn a total of 2,632 from holding Mid Cap 15x Strategy or generate 23.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mid Cap 15x Strategy vs. Saat Defensive Strategy
Performance |
| Timeline |
| Mid Cap 15x |
| Saat Defensive Strategy |
Mid-cap 15x and Saat Defensive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mid-cap 15x and Saat Defensive
The main advantage of trading using opposite Mid-cap 15x and Saat Defensive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mid-cap 15x 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.| Mid-cap 15x vs. Fidelity Advisor Energy | Mid-cap 15x vs. Invesco Energy Fund | Mid-cap 15x vs. Energy Services Fund | Mid-cap 15x vs. World Energy Fund |
| Saat Defensive vs. Saat Tax Managed Aggressive | Saat Defensive vs. Saat Market Growth | Saat Defensive vs. Saat Aggressive Strategy | Saat Defensive vs. Saat Aggressive Strategy |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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