Correlation Between Sa Real and Sa Emerging
Can any of the company-specific risk be diversified away by investing in both Sa Real and Sa Emerging 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 Sa Emerging 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 Sa Emerging Markets, you can compare the effects of market volatilities on Sa Real and Sa Emerging 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 Sa Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sa Real and Sa Emerging.
Diversification Opportunities for Sa Real and Sa Emerging
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between SAREX and SAEMX is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Sa Real Estate and Sa Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sa Emerging Markets 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 Sa Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sa Emerging Markets has no effect on the direction of Sa Real i.e., Sa Real and Sa Emerging go up and down completely randomly.
Pair Corralation between Sa Real and Sa Emerging
Assuming the 90 days horizon Sa Real Estate is expected to generate 1.31 times more return on investment than Sa Emerging. However, Sa Real is 1.31 times more volatile than Sa Emerging Markets. It trades about 0.25 of its potential returns per unit of risk. Sa Emerging Markets is currently generating about -0.21 per unit of risk. If you would invest 1,203 in Sa Real Estate on September 2, 2024 and sell it today you would earn a total of 57.00 from holding Sa Real Estate or generate 4.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sa Real Estate vs. Sa Emerging Markets
Performance |
| Timeline |
| Sa Real Estate |
| Sa Emerging Markets |
Sa Real and Sa Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sa Real and Sa Emerging
The main advantage of trading using opposite Sa Real and Sa Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sa Real position performs unexpectedly, Sa Emerging 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 Emerging will offset losses from the drop in Sa Emerging's long position.| Sa Real vs. Realty Income | Sa Real vs. Dynex Capital | Sa Real vs. First Industrial Realty | Sa Real vs. Healthcare Realty Trust |
| Sa Emerging vs. Sa Value | Sa Emerging vs. Sa International Small | Sa Emerging vs. Sa International Value | Sa Emerging vs. Sa Mkt Fd |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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