Correlation Between Sa Real and Great-west International
Can any of the company-specific risk be diversified away by investing in both Sa Real and Great-west International 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 Real and Great-west International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sa Real Estate and Great West International Index, you can compare the effects of market volatilities on Sa Real and Great-west International 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 Real with a short position of Great-west International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sa Real and Great-west International.
Diversification Opportunities for Sa Real and Great-west International
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SAREX and Great-west is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Sa Real Estate and Great West International Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great-west International and Sa Real 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 Real Estate are associated (or correlated) with Great-west International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great-west International has no effect on the direction of Sa Real i.e., Sa Real and Great-west International go up and down completely randomly.
Pair Corralation between Sa Real and Great-west International
Assuming the 90 days horizon Sa Real is expected to generate 1.87 times less return on investment than Great-west International. In addition to that, Sa Real is 1.7 times more volatile than Great West International Index. It trades about 0.06 of its total potential returns per unit of risk. Great West International Index is currently generating about 0.19 per unit of volatility. If you would invest 1,237 in Great West International Index on October 21, 2024 and sell it today you would earn a total of 27.00 from holding Great West International Index or generate 2.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sa Real Estate vs. Great West International Index
Performance |
| Timeline |
| Sa Real Estate |
| Great-west International |
Sa Real and Great-west International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sa Real and Great-west International
The main advantage of trading using opposite Sa Real and Great-west International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sa Real position performs unexpectedly, Great-west International 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 Great-west International will offset losses from the drop in Great-west International's long position.| Sa Real vs. Kinetics Global Fund | Sa Real vs. Legg Mason Global | Sa Real vs. Alliancebernstein Global Highome | Sa Real vs. Dreyfusstandish Global Fixed |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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