Correlation Between Sa Real and New Perspective
Can any of the company-specific risk be diversified away by investing in both Sa Real and New Perspective 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 New Perspective 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 New Perspective Fund, you can compare the effects of market volatilities on Sa Real and New Perspective 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 New Perspective. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sa Real and New Perspective.
Diversification Opportunities for Sa Real and New Perspective
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between SAREX and New is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Sa Real Estate and New Perspective Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Perspective 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 New Perspective. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Perspective has no effect on the direction of Sa Real i.e., Sa Real and New Perspective go up and down completely randomly.
Pair Corralation between Sa Real and New Perspective
Assuming the 90 days horizon Sa Real is expected to generate 1.34 times less return on investment than New Perspective. In addition to that, Sa Real is 1.38 times more volatile than New Perspective Fund. It trades about 0.05 of its total potential returns per unit of risk. New Perspective Fund is currently generating about 0.09 per unit of volatility. If you would invest 5,334 in New Perspective Fund on September 12, 2024 and sell it today you would earn a total of 1,386 from holding New Perspective Fund or generate 25.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sa Real Estate vs. New Perspective Fund
Performance |
| Timeline |
| Sa Real Estate |
| New Perspective |
Sa Real and New Perspective Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sa Real and New Perspective
The main advantage of trading using opposite Sa Real and New Perspective positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sa Real position performs unexpectedly, New Perspective 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 New Perspective will offset losses from the drop in New Perspective's long position.| Sa Real vs. Guggenheim Risk Managed | Sa Real vs. HUMANA INC | Sa Real vs. Barloworld Ltd ADR | Sa Real vs. Morningstar Unconstrained Allocation |
| New Perspective vs. Sa Real Estate | New Perspective vs. Guggenheim Risk Managed | New Perspective vs. Pender Real Estate | New Perspective vs. Prudential Real Estate |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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