Correlation Between Strategic Asset and Income Fund
Can any of the company-specific risk be diversified away by investing in both Strategic Asset and Income Fund 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 Income Fund 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 Income Fund Class, you can compare the effects of market volatilities on Strategic Asset and Income Fund 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 Income Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Strategic Asset and Income Fund.
Diversification Opportunities for Strategic Asset and Income Fund
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Strategic and Income is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Strategic Asset Management and Income Fund Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Income Fund Class 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 Income Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Income Fund Class has no effect on the direction of Strategic Asset i.e., Strategic Asset and Income Fund go up and down completely randomly.
Pair Corralation between Strategic Asset and Income Fund
Assuming the 90 days horizon Strategic Asset Management is expected to generate 2.2 times more return on investment than Income Fund. However, Strategic Asset is 2.2 times more volatile than Income Fund Class. It trades about 0.12 of its potential returns per unit of risk. Income Fund Class is currently generating about 0.09 per unit of risk. If you would invest 2,224 in Strategic Asset Management on September 1, 2024 and sell it today you would earn a total of 259.00 from holding Strategic Asset Management or generate 11.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Strategic Asset Management vs. Income Fund Class
Performance |
| Timeline |
| Strategic Asset Mana |
| Income Fund Class |
Strategic Asset and Income Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Strategic Asset and Income Fund
The main advantage of trading using opposite Strategic Asset and Income Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Strategic Asset position performs unexpectedly, Income Fund 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 Income Fund will offset losses from the drop in Income Fund's long position.| Strategic Asset vs. Strategic Asset Management | Strategic Asset vs. Strategic Asset Management | Strategic Asset vs. Strategic Asset Management | Strategic Asset vs. Strategic Asset Management |
| Income Fund vs. Strategic Asset Management | Income Fund vs. Strategic Asset Management | Income Fund vs. Strategic Asset Management | Income Fund vs. Strategic Asset Management |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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