Correlation Between Saba Capital and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Saba Capital and Dow Jones 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 Saba Capital and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Saba Capital Income and Dow Jones Industrial, you can compare the effects of market volatilities on Saba Capital and Dow Jones 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 Saba Capital with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saba Capital and Dow Jones.
Diversification Opportunities for Saba Capital and Dow Jones
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Saba and Dow is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Saba Capital Income and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and Saba Capital 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 Saba Capital Income are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Saba Capital i.e., Saba Capital and Dow Jones go up and down completely randomly.
Pair Corralation between Saba Capital and Dow Jones
Given the investment horizon of 90 days Saba Capital Income is expected to generate 0.97 times more return on investment than Dow Jones. However, Saba Capital Income is 1.03 times less risky than Dow Jones. It trades about 0.15 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.1 per unit of risk. If you would invest 708.00 in Saba Capital Income on September 12, 2024 and sell it today you would earn a total of 198.00 from holding Saba Capital Income or generate 27.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Saba Capital Income vs. Dow Jones Industrial
Performance |
| Timeline |
Saba Capital and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Saba Capital Income
Pair trading matchups for Saba Capital
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Saba Capital and Dow Jones
The main advantage of trading using opposite Saba Capital and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saba Capital position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Saba Capital vs. Vanguard Total Stock | Saba Capital vs. SPDR SP 500 | Saba Capital vs. iShares Core SP | Saba Capital vs. Vanguard Total Bond |
| Dow Jones vs. Aeye Inc | Dow Jones vs. Gentex | Dow Jones vs. Marine Products | Dow Jones vs. CarsalesCom Ltd ADR |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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