Correlation Between Sa Emerging and Sa Worldwide
Can any of the company-specific risk be diversified away by investing in both Sa Emerging and Sa Worldwide 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 Sa Emerging and Sa Worldwide into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sa Emerging Markets and Sa Worldwide Moderate, you can compare the effects of market volatilities on Sa Emerging and Sa Worldwide 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 Sa Emerging with a short position of Sa Worldwide. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sa Emerging and Sa Worldwide.
Diversification Opportunities for Sa Emerging and Sa Worldwide
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SAEMX and SAWMX is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Sa Emerging Markets and Sa Worldwide Moderate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sa Worldwide Moderate and Sa Emerging 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 Sa Emerging Markets are associated (or correlated) with Sa Worldwide. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sa Worldwide Moderate has no effect on the direction of Sa Emerging i.e., Sa Emerging and Sa Worldwide go up and down completely randomly.
Pair Corralation between Sa Emerging and Sa Worldwide
Assuming the 90 days horizon Sa Emerging is expected to generate 6.45 times less return on investment than Sa Worldwide. In addition to that, Sa Emerging is 1.75 times more volatile than Sa Worldwide Moderate. It trades about 0.01 of its total potential returns per unit of risk. Sa Worldwide Moderate is currently generating about 0.11 per unit of volatility. If you would invest 1,171 in Sa Worldwide Moderate on September 3, 2024 and sell it today you would earn a total of 79.00 from holding Sa Worldwide Moderate or generate 6.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sa Emerging Markets vs. Sa Worldwide Moderate
Performance |
| Timeline |
| Sa Emerging Markets |
| Sa Worldwide Moderate |
Sa Emerging and Sa Worldwide Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sa Emerging and Sa Worldwide
The main advantage of trading using opposite Sa Emerging and Sa Worldwide positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sa Emerging position performs unexpectedly, Sa Worldwide 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 Sa Worldwide will offset losses from the drop in Sa Worldwide's long position.| Sa Emerging vs. Issachar Fund Class | Sa Emerging vs. Growth Strategy Fund | Sa Emerging vs. Vanguard Windsor Fund | Sa Emerging vs. Auer Growth Fund |
| Sa Worldwide vs. Western Asset High | Sa Worldwide vs. Ab Global Risk | Sa Worldwide vs. Pioneer High Yield | Sa Worldwide vs. Multimanager Lifestyle Aggressive |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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