Correlation Between Sgi Prudent and Sgi Peak
Can any of the company-specific risk be diversified away by investing in both Sgi Prudent and Sgi Peak 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 Sgi Prudent and Sgi Peak into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sgi Prudent Growth and Sgi Peak Growth, you can compare the effects of market volatilities on Sgi Prudent and Sgi Peak 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 Sgi Prudent with a short position of Sgi Peak. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sgi Prudent and Sgi Peak.
Diversification Opportunities for Sgi Prudent and Sgi Peak
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Sgi and Sgi is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Sgi Prudent Growth and Sgi Peak Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sgi Peak Growth and Sgi Prudent 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 Sgi Prudent Growth are associated (or correlated) with Sgi Peak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sgi Peak Growth has no effect on the direction of Sgi Prudent i.e., Sgi Prudent and Sgi Peak go up and down completely randomly.
Pair Corralation between Sgi Prudent and Sgi Peak
Assuming the 90 days horizon Sgi Prudent is expected to generate 1.13 times less return on investment than Sgi Peak. But when comparing it to its historical volatility, Sgi Prudent Growth is 1.38 times less risky than Sgi Peak. It trades about 0.1 of its potential returns per unit of risk. Sgi Peak Growth is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,183 in Sgi Peak Growth on September 3, 2024 and sell it today you would earn a total of 119.00 from holding Sgi Peak Growth or generate 10.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sgi Prudent Growth vs. Sgi Peak Growth
Performance |
| Timeline |
| Sgi Prudent Growth |
| Sgi Peak Growth |
Sgi Prudent and Sgi Peak Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sgi Prudent and Sgi Peak
The main advantage of trading using opposite Sgi Prudent and Sgi Peak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sgi Prudent position performs unexpectedly, Sgi Peak 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 Sgi Peak will offset losses from the drop in Sgi Peak's long position.| Sgi Prudent vs. American Funds American | Sgi Prudent vs. American Funds American | Sgi Prudent vs. American Balanced | Sgi Prudent vs. American Balanced Fund |
| Sgi Peak vs. Massmutual Premier Diversified | Sgi Peak vs. Blackrock Sm Cap | Sgi Peak vs. Wasatch Small Cap | Sgi Peak vs. Northern Small 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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