Correlation Between Saat Market and Prudential Emerging
Can any of the company-specific risk be diversified away by investing in both Saat Market and Prudential Emerging 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 Market and Prudential Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Saat Market Growth and Prudential Emerging Markets, you can compare the effects of market volatilities on Saat Market and Prudential Emerging 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 Market with a short position of Prudential Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saat Market and Prudential Emerging.
Diversification Opportunities for Saat Market and Prudential Emerging
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Saat and Prudential is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Saat Market Growth and Prudential Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prudential Emerging and Saat Market 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 Market Growth are associated (or correlated) with Prudential Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prudential Emerging has no effect on the direction of Saat Market i.e., Saat Market and Prudential Emerging go up and down completely randomly.
Pair Corralation between Saat Market and Prudential Emerging
Assuming the 90 days horizon Saat Market Growth is expected to generate 1.19 times more return on investment than Prudential Emerging. However, Saat Market is 1.19 times more volatile than Prudential Emerging Markets. It trades about 0.09 of its potential returns per unit of risk. Prudential Emerging Markets is currently generating about 0.01 per unit of risk. If you would invest 1,127 in Saat Market Growth on November 9, 2024 and sell it today you would earn a total of 144.00 from holding Saat Market Growth or generate 12.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Saat Market Growth vs. Prudential Emerging Markets
Performance |
| Timeline |
| Saat Market Growth |
| Prudential Emerging |
Saat Market and Prudential Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Saat Market and Prudential Emerging
The main advantage of trading using opposite Saat Market and Prudential Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saat Market position performs unexpectedly, Prudential Emerging 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 Prudential Emerging will offset losses from the drop in Prudential Emerging's long position.| Saat Market vs. Great West Government Mortgage | Saat Market vs. Fidelity Series Government | Saat Market vs. Ridgeworth Seix Government | Saat Market vs. Wesmark Government Bond |
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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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