Correlation Between Saat Market and Balanced Strategy
Can any of the company-specific risk be diversified away by investing in both Saat Market and Balanced Strategy 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 Balanced Strategy 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 Balanced Strategy Fund, you can compare the effects of market volatilities on Saat Market and Balanced Strategy 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 Balanced Strategy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saat Market and Balanced Strategy.
Diversification Opportunities for Saat Market and Balanced Strategy
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Saat and Balanced is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Saat Market Growth and Balanced Strategy Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Balanced Strategy 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 Balanced Strategy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Balanced Strategy has no effect on the direction of Saat Market i.e., Saat Market and Balanced Strategy go up and down completely randomly.
Pair Corralation between Saat Market and Balanced Strategy
Assuming the 90 days horizon Saat Market Growth is expected to generate 0.81 times more return on investment than Balanced Strategy. However, Saat Market Growth is 1.23 times less risky than Balanced Strategy. It trades about 0.22 of its potential returns per unit of risk. Balanced Strategy Fund is currently generating about 0.16 per unit of risk. If you would invest 1,236 in Saat Market Growth on November 7, 2024 and sell it today you would earn a total of 27.00 from holding Saat Market Growth or generate 2.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Saat Market Growth vs. Balanced Strategy Fund
Performance |
| Timeline |
| Saat Market Growth |
| Balanced Strategy |
Saat Market and Balanced Strategy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Saat Market and Balanced Strategy
The main advantage of trading using opposite Saat Market and Balanced Strategy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saat Market position performs unexpectedly, Balanced Strategy 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 Balanced Strategy will offset losses from the drop in Balanced Strategy's long position.| Saat Market vs. Simt Mid Cap | Saat Market vs. Saat Tax Managed Aggressive | Saat Market vs. Sit Emerging Markets | Saat Market vs. Simt High Yield |
| Balanced Strategy vs. American Century Diversified | Balanced Strategy vs. Issachar Fund Class | Balanced Strategy vs. Guggenheim Diversified Income | Balanced Strategy vs. Aqr Diversified Arbitrage |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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