Correlation Between Saat Aggressive and Saat Conservative
Can any of the company-specific risk be diversified away by investing in both Saat Aggressive and Saat Conservative 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 Saat Aggressive and Saat Conservative into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Saat Aggressive Strategy and Saat Servative Strategy, you can compare the effects of market volatilities on Saat Aggressive and Saat Conservative 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 Saat Aggressive with a short position of Saat Conservative. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saat Aggressive and Saat Conservative.
Diversification Opportunities for Saat Aggressive and Saat Conservative
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Saat and Saat is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Saat Aggressive Strategy and Saat Servative Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saat Servative Strategy and Saat Aggressive 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 Saat Aggressive Strategy are associated (or correlated) with Saat Conservative. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saat Servative Strategy has no effect on the direction of Saat Aggressive i.e., Saat Aggressive and Saat Conservative go up and down completely randomly.
Pair Corralation between Saat Aggressive and Saat Conservative
Assuming the 90 days horizon Saat Aggressive is expected to generate 1.25 times less return on investment than Saat Conservative. In addition to that, Saat Aggressive is 1.95 times more volatile than Saat Servative Strategy. It trades about 0.11 of its total potential returns per unit of risk. Saat Servative Strategy is currently generating about 0.26 per unit of volatility. If you would invest 1,162 in Saat Servative Strategy on September 1, 2024 and sell it today you would earn a total of 128.00 from holding Saat Servative Strategy or generate 11.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Saat Aggressive Strategy vs. Saat Servative Strategy
Performance |
| Timeline |
| Saat Aggressive Strategy |
| Saat Servative Strategy |
Saat Aggressive and Saat Conservative Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Saat Aggressive and Saat Conservative
The main advantage of trading using opposite Saat Aggressive and Saat Conservative positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saat Aggressive position performs unexpectedly, Saat Conservative 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 Saat Conservative will offset losses from the drop in Saat Conservative's long position.| Saat Aggressive vs. Transamerica Cleartrack Retirement | Saat Aggressive vs. Franklin Lifesmart Retirement | Saat Aggressive vs. Moderately Aggressive Balanced | Saat Aggressive vs. Lifestyle Ii Moderate |
| Saat Conservative vs. Rational Defensive Growth | Saat Conservative vs. Small Midcap Dividend Income | Saat Conservative vs. Eip Growth And | Saat Conservative vs. Champlain Mid Cap |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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