Correlation Between Stet California and Saat Market
Can any of the company-specific risk be diversified away by investing in both Stet California and Saat Market 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 Stet California and Saat Market into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stet California Municipal and Saat Market Growth, you can compare the effects of market volatilities on Stet California and Saat Market 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 Stet California with a short position of Saat Market. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stet California and Saat Market.
Diversification Opportunities for Stet California and Saat Market
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Stet and Saat is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Stet California Municipal and Saat Market Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saat Market Growth and Stet California 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 Stet California Municipal are associated (or correlated) with Saat Market. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saat Market Growth has no effect on the direction of Stet California i.e., Stet California and Saat Market go up and down completely randomly.
Pair Corralation between Stet California and Saat Market
Assuming the 90 days horizon Stet California is expected to generate 10.67 times less return on investment than Saat Market. But when comparing it to its historical volatility, Stet California Municipal is 2.68 times less risky than Saat Market. It trades about 0.02 of its potential returns per unit of risk. Saat Market Growth is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,107 in Saat Market Growth on November 9, 2024 and sell it today you would earn a total of 137.00 from holding Saat Market Growth or generate 12.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.63% |
| Values | Daily Returns |
Stet California Municipal vs. Saat Market Growth
Performance |
| Timeline |
| Stet California Municipal |
| Saat Market Growth |
Stet California and Saat Market Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stet California and Saat Market
The main advantage of trading using opposite Stet California and Saat Market positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stet California position performs unexpectedly, Saat Market 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 Market will offset losses from the drop in Saat Market's long position.| Stet California vs. Rbc Global Equity | Stet California vs. Gmo Global Equity | Stet California vs. Us Global Investors | Stet California vs. Ms Global Fixed |
| Saat Market vs. Balanced Strategy Fund | Saat Market vs. Artisan Developing World | Saat Market vs. Transamerica Emerging Markets | Saat Market vs. Jpmorgan Emerging Markets |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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