Correlation Between Saat Defensive and Vanguard Emerging
Can any of the company-specific risk be diversified away by investing in both Saat Defensive and Vanguard 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 Saat Defensive and Vanguard Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Saat Defensive Strategy and Vanguard Emerging Markets, you can compare the effects of market volatilities on Saat Defensive and Vanguard 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 Saat Defensive with a short position of Vanguard Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saat Defensive and Vanguard Emerging.
Diversification Opportunities for Saat Defensive and Vanguard Emerging
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Saat and VANGUARD is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Saat Defensive Strategy and Vanguard Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Emerging Markets and Saat Defensive 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 Defensive Strategy are associated (or correlated) with Vanguard Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Emerging Markets has no effect on the direction of Saat Defensive i.e., Saat Defensive and Vanguard Emerging go up and down completely randomly.
Pair Corralation between Saat Defensive and Vanguard Emerging
Assuming the 90 days horizon Saat Defensive is expected to generate 1.88 times less return on investment than Vanguard Emerging. But when comparing it to its historical volatility, Saat Defensive Strategy is 2.47 times less risky than Vanguard Emerging. It trades about 0.12 of its potential returns per unit of risk. Vanguard Emerging Markets is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,998 in Vanguard Emerging Markets on October 23, 2024 and sell it today you would earn a total of 342.00 from holding Vanguard Emerging Markets or generate 17.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Saat Defensive Strategy vs. Vanguard Emerging Markets
Performance |
| Timeline |
| Saat Defensive Strategy |
| Vanguard Emerging Markets |
Saat Defensive and Vanguard Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Saat Defensive and Vanguard Emerging
The main advantage of trading using opposite Saat Defensive and Vanguard Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saat Defensive position performs unexpectedly, Vanguard 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 Vanguard Emerging will offset losses from the drop in Vanguard Emerging's long position.| Saat Defensive vs. Nuveen Strategic Municipal | Saat Defensive vs. Transamerica Intermediate Muni | Saat Defensive vs. Bbh Intermediate Municipal | Saat Defensive vs. Lord Abbett Intermediate |
| Vanguard Emerging vs. Vanguard Materials Index | Vanguard Emerging vs. Vanguard Limited Term Tax Exempt | Vanguard Emerging vs. Vanguard Limited Term Tax Exempt | Vanguard Emerging vs. Vanguard Global Minimum |
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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