Correlation Between Saat Moderate and Health Biotchnology
Can any of the company-specific risk be diversified away by investing in both Saat Moderate and Health Biotchnology 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 Health Biotchnology 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 Health Biotchnology Portfolio, you can compare the effects of market volatilities on Saat Moderate and Health Biotchnology 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 Health Biotchnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saat Moderate and Health Biotchnology.
Diversification Opportunities for Saat Moderate and Health Biotchnology
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Saat and Health is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Saat Moderate Strategy and Health Biotchnology Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Health Biotchnology 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 Health Biotchnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Health Biotchnology has no effect on the direction of Saat Moderate i.e., Saat Moderate and Health Biotchnology go up and down completely randomly.
Pair Corralation between Saat Moderate and Health Biotchnology
Assuming the 90 days horizon Saat Moderate Strategy is expected to generate 0.27 times more return on investment than Health Biotchnology. However, Saat Moderate Strategy is 3.77 times less risky than Health Biotchnology. It trades about 0.18 of its potential returns per unit of risk. Health Biotchnology Portfolio is currently generating about 0.03 per unit of risk. If you would invest 1,176 in Saat Moderate Strategy on August 31, 2024 and sell it today you would earn a total of 12.00 from holding Saat Moderate Strategy or generate 1.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Saat Moderate Strategy vs. Health Biotchnology Portfolio
Performance |
| Timeline |
| Saat Moderate Strategy |
| Health Biotchnology |
Saat Moderate and Health Biotchnology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Saat Moderate and Health Biotchnology
The main advantage of trading using opposite Saat Moderate and Health Biotchnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saat Moderate position performs unexpectedly, Health Biotchnology 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 Health Biotchnology will offset losses from the drop in Health Biotchnology'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 |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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