Correlation Between Saat Moderate and Regional Bank
Can any of the company-specific risk be diversified away by investing in both Saat Moderate and Regional Bank 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 Regional Bank 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 Regional Bank Fund, you can compare the effects of market volatilities on Saat Moderate and Regional Bank 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 Regional Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saat Moderate and Regional Bank.
Diversification Opportunities for Saat Moderate and Regional Bank
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Saat and Regional is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Saat Moderate Strategy and Regional Bank Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regional Bank 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 Regional Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Regional Bank has no effect on the direction of Saat Moderate i.e., Saat Moderate and Regional Bank go up and down completely randomly.
Pair Corralation between Saat Moderate and Regional Bank
Assuming the 90 days horizon Saat Moderate is expected to generate 12.64 times less return on investment than Regional Bank. But when comparing it to its historical volatility, Saat Moderate Strategy is 11.35 times less risky than Regional Bank. It trades about 0.18 of its potential returns per unit of risk. Regional Bank Fund is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 2,832 in Regional Bank Fund on August 31, 2024 and sell it today you would earn a total of 363.00 from holding Regional Bank Fund or generate 12.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Saat Moderate Strategy vs. Regional Bank Fund
Performance |
| Timeline |
| Saat Moderate Strategy |
| Regional Bank |
Saat Moderate and Regional Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Saat Moderate and Regional Bank
The main advantage of trading using opposite Saat Moderate and Regional Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saat Moderate position performs unexpectedly, Regional Bank 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 Regional Bank will offset losses from the drop in Regional Bank's long position.| Saat Moderate vs. Aqr Large Cap | Saat Moderate vs. T Rowe Price | Saat Moderate vs. Legg Mason Bw | Saat Moderate vs. Dana Large Cap |
| Regional Bank vs. Vanguard Financials Index | Regional Bank vs. Regional Bank Fund | Regional Bank vs. T Rowe Price | Regional Bank vs. Financial Industries Fund |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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