Correlation Between Sa Real and Westwood Largecap
Can any of the company-specific risk be diversified away by investing in both Sa Real and Westwood Largecap 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 Westwood Largecap 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 Westwood Largecap Value, you can compare the effects of market volatilities on Sa Real and Westwood Largecap 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 Westwood Largecap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sa Real and Westwood Largecap.
Diversification Opportunities for Sa Real and Westwood Largecap
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between SAREX and Westwood is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Sa Real Estate and Westwood Largecap Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westwood Largecap Value 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 Westwood Largecap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Westwood Largecap Value has no effect on the direction of Sa Real i.e., Sa Real and Westwood Largecap go up and down completely randomly.
Pair Corralation between Sa Real and Westwood Largecap
Assuming the 90 days horizon Sa Real is expected to generate 1.29 times less return on investment than Westwood Largecap. In addition to that, Sa Real is 1.85 times more volatile than Westwood Largecap Value. It trades about 0.14 of its total potential returns per unit of risk. Westwood Largecap Value is currently generating about 0.34 per unit of volatility. If you would invest 1,354 in Westwood Largecap Value on November 9, 2024 and sell it today you would earn a total of 62.00 from holding Westwood Largecap Value or generate 4.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sa Real Estate vs. Westwood Largecap Value
Performance |
| Timeline |
| Sa Real Estate |
| Westwood Largecap Value |
Sa Real and Westwood Largecap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sa Real and Westwood Largecap
The main advantage of trading using opposite Sa Real and Westwood Largecap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sa Real position performs unexpectedly, Westwood Largecap 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 Westwood Largecap will offset losses from the drop in Westwood Largecap's long position.| Sa Real vs. Guidemark Large Cap | Sa Real vs. Vest Large Cap | Sa Real vs. Guidemark Large Cap | Sa Real vs. Dodge Cox Stock |
| Westwood Largecap vs. Dreyfusstandish Global Fixed | Westwood Largecap vs. Aqr Long Short Equity | Westwood Largecap vs. Aqr Long Short Equity | Westwood Largecap 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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