Correlation Between Saat Moderate and Science Technology
Can any of the company-specific risk be diversified away by investing in both Saat Moderate and Science Technology 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 Science Technology 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 Science Technology Fund, you can compare the effects of market volatilities on Saat Moderate and Science Technology 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 Science Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saat Moderate and Science Technology.
Diversification Opportunities for Saat Moderate and Science Technology
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Saat and Science is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Saat Moderate Strategy and Science Technology Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Science Technology 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 Science Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Science Technology has no effect on the direction of Saat Moderate i.e., Saat Moderate and Science Technology go up and down completely randomly.
Pair Corralation between Saat Moderate and Science Technology
Assuming the 90 days horizon Saat Moderate is expected to generate 6.89 times less return on investment than Science Technology. But when comparing it to its historical volatility, Saat Moderate Strategy is 3.61 times less risky than Science Technology. It trades about 0.05 of its potential returns per unit of risk. Science Technology Fund is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,695 in Science Technology Fund on August 26, 2024 and sell it today you would earn a total of 1,169 from holding Science Technology Fund or generate 68.97% 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. Science Technology Fund
Performance |
| Timeline |
| Saat Moderate Strategy |
| Science Technology |
Saat Moderate and Science Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Saat Moderate and Science Technology
The main advantage of trading using opposite Saat Moderate and Science Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saat Moderate position performs unexpectedly, Science Technology 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 Science Technology will offset losses from the drop in Science Technology's long position.| Saat Moderate vs. Simt Multi Asset Accumulation | Saat Moderate vs. Saat Market Growth | Saat Moderate vs. Simt Real Return | Saat Moderate vs. Simt 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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