Correlation Between Saat Aggressive and Ultra Short

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Can any of the company-specific risk be diversified away by investing in both Saat Aggressive and Ultra Short 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 Ultra Short 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 Ultra Short Term Fixed, you can compare the effects of market volatilities on Saat Aggressive and Ultra Short 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 Ultra Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saat Aggressive and Ultra Short.

Diversification Opportunities for Saat Aggressive and Ultra Short

0.68
  Correlation Coefficient

Poor diversification

The 3 months correlation between Saat and Ultra is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Saat Aggressive Strategy and Ultra Short Term Fixed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ultra Short Term 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 Ultra Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ultra Short Term has no effect on the direction of Saat Aggressive i.e., Saat Aggressive and Ultra Short go up and down completely randomly.

Pair Corralation between Saat Aggressive and Ultra Short

Assuming the 90 days horizon Saat Aggressive Strategy is expected to generate 11.51 times more return on investment than Ultra Short. However, Saat Aggressive is 11.51 times more volatile than Ultra Short Term Fixed. It trades about 0.09 of its potential returns per unit of risk. Ultra Short Term Fixed is currently generating about 0.45 per unit of risk. If you would invest  1,217  in Saat Aggressive Strategy on September 1, 2024 and sell it today you would earn a total of  258.00  from holding Saat Aggressive Strategy or generate 21.2% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy99.73%
ValuesDaily Returns

Saat Aggressive Strategy  vs.  Ultra Short Term Fixed

 Performance 
       Timeline  
Saat Aggressive Strategy 

Risk-Adjusted Performance

12 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Saat Aggressive Strategy are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Saat Aggressive is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Ultra Short Term 

Risk-Adjusted Performance

21 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Ultra Short Term Fixed are ranked lower than 21 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Ultra Short is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Saat Aggressive and Ultra Short Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Saat Aggressive and Ultra Short

The main advantage of trading using opposite Saat Aggressive and Ultra Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saat Aggressive position performs unexpectedly, Ultra Short 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 Ultra Short will offset losses from the drop in Ultra Short's long position.
The idea behind Saat Aggressive Strategy and Ultra Short Term Fixed pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.

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