Correlation Between Saat Defensive and Live Oak
Can any of the company-specific risk be diversified away by investing in both Saat Defensive and Live Oak 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 Defensive and Live Oak into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Saat Defensive Strategy and Live Oak Health, you can compare the effects of market volatilities on Saat Defensive and Live Oak 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 Defensive with a short position of Live Oak. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saat Defensive and Live Oak.
Diversification Opportunities for Saat Defensive and Live Oak
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Saat and Live is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Saat Defensive Strategy and Live Oak Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Live Oak Health and Saat Defensive 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 Defensive Strategy are associated (or correlated) with Live Oak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Live Oak Health has no effect on the direction of Saat Defensive i.e., Saat Defensive and Live Oak go up and down completely randomly.
Pair Corralation between Saat Defensive and Live Oak
Assuming the 90 days horizon Saat Defensive Strategy is expected to generate 0.17 times more return on investment than Live Oak. However, Saat Defensive Strategy is 5.87 times less risky than Live Oak. It trades about 0.2 of its potential returns per unit of risk. Live Oak Health is currently generating about 0.03 per unit of risk. If you would invest 910.00 in Saat Defensive Strategy on September 2, 2024 and sell it today you would earn a total of 63.00 from holding Saat Defensive Strategy or generate 6.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Saat Defensive Strategy vs. Live Oak Health
Performance |
| Timeline |
| Saat Defensive Strategy |
| Live Oak Health |
Saat Defensive and Live Oak Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Saat Defensive and Live Oak
The main advantage of trading using opposite Saat Defensive and Live Oak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saat Defensive position performs unexpectedly, Live Oak 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 Live Oak will offset losses from the drop in Live Oak's long position.| Saat Defensive vs. Simt Multi Asset Accumulation | Saat Defensive vs. Saat Market Growth | Saat Defensive vs. Simt Real Return | Saat Defensive vs. Simt Small Cap |
| Live Oak vs. Black Oak Emerging | Live Oak vs. Pin Oak Equity | Live Oak vs. Red Oak Technology | Live Oak vs. White Oak Select |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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