Correlation Between SAF Special and Stock Exchange
Can any of the company-specific risk be diversified away by investing in both SAF Special and Stock Exchange 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 SAF Special and Stock Exchange into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SAF Special Steel and Stock Exchange Of, you can compare the effects of market volatilities on SAF Special and Stock Exchange 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 SAF Special with a short position of Stock Exchange. Check out your portfolio center. Please also check ongoing floating volatility patterns of SAF Special and Stock Exchange.
Diversification Opportunities for SAF Special and Stock Exchange
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between SAF and Stock is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding SAF Special Steel and Stock Exchange Of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stock Exchange and SAF Special 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 SAF Special Steel are associated (or correlated) with Stock Exchange. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stock Exchange has no effect on the direction of SAF Special i.e., SAF Special and Stock Exchange go up and down completely randomly.
Pair Corralation between SAF Special and Stock Exchange
Assuming the 90 days trading horizon SAF Special Steel is expected to generate 8.42 times more return on investment than Stock Exchange. However, SAF Special is 8.42 times more volatile than Stock Exchange Of. It trades about 0.06 of its potential returns per unit of risk. Stock Exchange Of is currently generating about -0.07 per unit of risk. If you would invest 49.00 in SAF Special Steel on September 14, 2024 and sell it today you would earn a total of 2.00 from holding SAF Special Steel or generate 4.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SAF Special Steel vs. Stock Exchange Of
Performance |
| Timeline |
SAF Special and Stock Exchange Volatility Contrast
Predicted Return Density |
| Returns |
SAF Special Steel
Pair trading matchups for SAF Special
Stock Exchange Of
Pair trading matchups for Stock Exchange
Pair Trading with SAF Special and Stock Exchange
The main advantage of trading using opposite SAF Special and Stock Exchange positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SAF Special position performs unexpectedly, Stock Exchange 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 Stock Exchange will offset losses from the drop in Stock Exchange's long position.| SAF Special vs. Ratchthani Leasing Public | SAF Special vs. LH Hotel Leasehold | SAF Special vs. BA Airport Leasehold | SAF Special vs. KTBST Mixed Leasehold |
| Stock Exchange vs. Tipco Foods Public | Stock Exchange vs. INET Leasehold REIT | Stock Exchange vs. Digital Telecommunications Infrastructure | Stock Exchange vs. Eastern Commercial Leasing |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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