Correlation Between Strategic Asset and Edge Midcap
Can any of the company-specific risk be diversified away by investing in both Strategic Asset and Edge Midcap 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 Edge Midcap 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 Edge Midcap Fund, you can compare the effects of market volatilities on Strategic Asset and Edge Midcap 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 Edge Midcap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Strategic Asset and Edge Midcap.
Diversification Opportunities for Strategic Asset and Edge Midcap
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Strategic and Edge is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Strategic Asset Management and Edge Midcap Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Edge Midcap Fund 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 Edge Midcap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Edge Midcap Fund has no effect on the direction of Strategic Asset i.e., Strategic Asset and Edge Midcap go up and down completely randomly.
Pair Corralation between Strategic Asset and Edge Midcap
Assuming the 90 days horizon Strategic Asset Management is expected to generate 0.56 times more return on investment than Edge Midcap. However, Strategic Asset Management is 1.8 times less risky than Edge Midcap. It trades about 0.07 of its potential returns per unit of risk. Edge Midcap Fund is currently generating about 0.03 per unit of risk. If you would invest 1,443 in Strategic Asset Management on September 3, 2024 and sell it today you would earn a total of 319.00 from holding Strategic Asset Management or generate 22.11% 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. Edge Midcap Fund
Performance |
| Timeline |
| Strategic Asset Mana |
| Edge Midcap Fund |
Strategic Asset and Edge Midcap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Strategic Asset and Edge Midcap
The main advantage of trading using opposite Strategic Asset and Edge Midcap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Strategic Asset position performs unexpectedly, Edge Midcap 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 Edge Midcap will offset losses from the drop in Edge Midcap's long position.| Strategic Asset vs. Siit High Yield | Strategic Asset vs. Calvert High Yield | Strategic Asset vs. Gmo High Yield | Strategic Asset vs. Msift High Yield |
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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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