Correlation Between Banking Fund and Saat Market
Can any of the company-specific risk be diversified away by investing in both Banking Fund and Saat Market 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 Banking Fund and Saat Market into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Banking Fund Class and Saat Market Growth, you can compare the effects of market volatilities on Banking Fund and Saat Market 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 Banking Fund with a short position of Saat Market. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banking Fund and Saat Market.
Diversification Opportunities for Banking Fund and Saat Market
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Banking and Saat is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Banking Fund Class and Saat Market Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saat Market Growth and Banking Fund 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 Banking Fund Class are associated (or correlated) with Saat Market. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saat Market Growth has no effect on the direction of Banking Fund i.e., Banking Fund and Saat Market go up and down completely randomly.
Pair Corralation between Banking Fund and Saat Market
Assuming the 90 days horizon Banking Fund Class is expected to generate 2.5 times more return on investment than Saat Market. However, Banking Fund is 2.5 times more volatile than Saat Market Growth. It trades about 0.18 of its potential returns per unit of risk. Saat Market Growth is currently generating about 0.19 per unit of risk. If you would invest 7,536 in Banking Fund Class on October 25, 2024 and sell it today you would earn a total of 323.00 from holding Banking Fund Class or generate 4.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Banking Fund Class vs. Saat Market Growth
Performance |
| Timeline |
| Banking Fund Class |
| Saat Market Growth |
Banking Fund and Saat Market Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banking Fund and Saat Market
The main advantage of trading using opposite Banking Fund and Saat Market positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banking Fund position performs unexpectedly, Saat Market 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 Market will offset losses from the drop in Saat Market's long position.| Banking Fund vs. Dodge Cox Stock | Banking Fund vs. Tax Managed Large Cap | Banking Fund vs. Nuveen Nwq Large Cap | Banking Fund vs. Americafirst Large Cap |
| Saat Market vs. Rmb Mendon Financial | Saat Market vs. Pimco Capital Sec | Saat Market vs. Putnam Global Financials | Saat Market vs. Blackrock Financial Institutions |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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