Correlation Between Saat Moderate and Pro-blend(r) Moderate
Can any of the company-specific risk be diversified away by investing in both Saat Moderate and Pro-blend(r) Moderate 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 Pro-blend(r) Moderate 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 Pro Blend Moderate Term, you can compare the effects of market volatilities on Saat Moderate and Pro-blend(r) Moderate 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 Pro-blend(r) Moderate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saat Moderate and Pro-blend(r) Moderate.
Diversification Opportunities for Saat Moderate and Pro-blend(r) Moderate
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Saat and Pro-blend(r) is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Saat Moderate Strategy and Pro Blend Moderate Term in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pro-blend(r) Moderate 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 Pro-blend(r) Moderate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pro-blend(r) Moderate has no effect on the direction of Saat Moderate i.e., Saat Moderate and Pro-blend(r) Moderate go up and down completely randomly.
Pair Corralation between Saat Moderate and Pro-blend(r) Moderate
Assuming the 90 days horizon Saat Moderate Strategy is expected to generate 0.63 times more return on investment than Pro-blend(r) Moderate. However, Saat Moderate Strategy is 1.58 times less risky than Pro-blend(r) Moderate. It trades about 0.37 of its potential returns per unit of risk. Pro Blend Moderate Term is currently generating about 0.2 per unit of risk. If you would invest 1,170 in Saat Moderate Strategy on September 1, 2024 and sell it today you would earn a total of 21.00 from holding Saat Moderate Strategy or generate 1.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Saat Moderate Strategy vs. Pro Blend Moderate Term
Performance |
| Timeline |
| Saat Moderate Strategy |
| Pro-blend(r) Moderate |
Saat Moderate and Pro-blend(r) Moderate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Saat Moderate and Pro-blend(r) Moderate
The main advantage of trading using opposite Saat Moderate and Pro-blend(r) Moderate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saat Moderate position performs unexpectedly, Pro-blend(r) Moderate 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 Pro-blend(r) Moderate will offset losses from the drop in Pro-blend(r) Moderate's long position.| Saat Moderate vs. The Gabelli Small | Saat Moderate vs. Jhancock Diversified Macro | Saat Moderate vs. Delaware Limited Term Diversified | Saat Moderate vs. Lord Abbett Diversified |
| Pro-blend(r) Moderate vs. Pro Blend Servative Term | Pro-blend(r) Moderate vs. Pro Blend Extended Term | Pro-blend(r) Moderate vs. Pro Blend Maximum Term | Pro-blend(r) Moderate vs. Greenspring Fund Retail |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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