Correlation Between Saat Moderate and Parametric International
Can any of the company-specific risk be diversified away by investing in both Saat Moderate and Parametric International 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 Moderate and Parametric International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Saat Moderate Strategy and Parametric International Equity, you can compare the effects of market volatilities on Saat Moderate and Parametric International 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 Moderate with a short position of Parametric International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saat Moderate and Parametric International.
Diversification Opportunities for Saat Moderate and Parametric International
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Saat and Parametric is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Saat Moderate Strategy and Parametric International Equit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Parametric International and Saat Moderate 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 Moderate Strategy are associated (or correlated) with Parametric International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Parametric International has no effect on the direction of Saat Moderate i.e., Saat Moderate and Parametric International go up and down completely randomly.
Pair Corralation between Saat Moderate and Parametric International
Assuming the 90 days horizon Saat Moderate Strategy is expected to generate 0.35 times more return on investment than Parametric International. However, Saat Moderate Strategy is 2.84 times less risky than Parametric International. It trades about 0.05 of its potential returns per unit of risk. Parametric International Equity is currently generating about -0.12 per unit of risk. If you would invest 1,176 in Saat Moderate Strategy on August 28, 2024 and sell it today you would earn a total of 10.00 from holding Saat Moderate Strategy or generate 0.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Saat Moderate Strategy vs. Parametric International Equit
Performance |
| Timeline |
| Saat Moderate Strategy |
| Parametric International |
Saat Moderate and Parametric International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Saat Moderate and Parametric International
The main advantage of trading using opposite Saat Moderate and Parametric International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saat Moderate position performs unexpectedly, Parametric International 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 Parametric International will offset losses from the drop in Parametric International's long position.| Saat Moderate vs. Omni Small Cap Value | Saat Moderate vs. Ab Global Risk | Saat Moderate vs. Archer Balanced Fund | Saat Moderate vs. Materials Portfolio Fidelity |
| Parametric International vs. Eaton Vance Msschsts | Parametric International vs. Eaton Vance Municipal | Parametric International vs. Eaton Vance Municipal | Parametric International vs. Eaton Vance Municipal |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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