Correlation Between Saat Market and Pace High

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Can any of the company-specific risk be diversified away by investing in both Saat Market and Pace High 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 Pace High 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 Pace High Yield, you can compare the effects of market volatilities on Saat Market and Pace High 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 Pace High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saat Market and Pace High.

Diversification Opportunities for Saat Market and Pace High

SaatPACEDiversified AwaySaatPACEDiversified Away100%
0.52
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Saat and PACE is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Saat Market Growth and Pace High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pace High Yield 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 Pace High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pace High Yield has no effect on the direction of Saat Market i.e., Saat Market and Pace High go up and down completely randomly.

Pair Corralation between Saat Market and Pace High

Assuming the 90 days horizon Saat Market Growth is expected to generate 2.35 times more return on investment than Pace High. However, Saat Market is 2.35 times more volatile than Pace High Yield. It trades about 0.12 of its potential returns per unit of risk. Pace High Yield is currently generating about 0.13 per unit of risk. If you would invest  1,260  in Saat Market Growth on November 29, 2024 and sell it today you would earn a total of  12.00  from holding Saat Market Growth or generate 0.95% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Saat Market Growth  vs.  Pace High Yield

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -3-2-1012
JavaScript chart by amCharts 3.21.15SRWAX PHIAX
       Timeline  
Saat Market Growth 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Saat Market Growth has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Saat Market is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb12.212.312.412.512.612.712.812.9
Pace High Yield 

Risk-Adjusted Performance

OK

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Pace High Yield are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Pace High is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb8.688.78.728.748.768.788.88.828.84

Saat Market and Pace High Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-1.91-1.42-0.93-0.440.010.470.961.451.94 51015
JavaScript chart by amCharts 3.21.15SRWAX PHIAX
       Returns  

Pair Trading with Saat Market and Pace High

The main advantage of trading using opposite Saat Market and Pace High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saat Market position performs unexpectedly, Pace High 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 Pace High will offset losses from the drop in Pace High's long position.
The idea behind Saat Market Growth and Pace High Yield pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.

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