Correlation Between Saat Market and Sit Emerging
Can any of the company-specific risk be diversified away by investing in both Saat Market and Sit 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 Sit 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 Sit Emerging Markets, you can compare the effects of market volatilities on Saat Market and Sit 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 Sit Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saat Market and Sit Emerging.
Diversification Opportunities for Saat Market and Sit Emerging
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Saat and Sit is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Saat Market Growth and Sit Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sit Emerging Markets 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 Sit Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sit Emerging Markets has no effect on the direction of Saat Market i.e., Saat Market and Sit Emerging go up and down completely randomly.
Pair Corralation between Saat Market and Sit Emerging
Assuming the 90 days horizon Saat Market Growth is expected to generate 0.54 times more return on investment than Sit Emerging. However, Saat Market Growth is 1.84 times less risky than Sit Emerging. It trades about 0.11 of its potential returns per unit of risk. Sit Emerging Markets is currently generating about 0.03 per unit of risk. If you would invest 1,094 in Saat Market Growth on August 31, 2024 and sell it today you would earn a total of 210.00 from holding Saat Market Growth or generate 19.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.73% |
| Values | Daily Returns |
Saat Market Growth vs. Sit Emerging Markets
Performance |
| Timeline |
| Saat Market Growth |
| Sit Emerging Markets |
Saat Market and Sit Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Saat Market and Sit Emerging
The main advantage of trading using opposite Saat Market and Sit Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saat Market position performs unexpectedly, Sit 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 Sit Emerging will offset losses from the drop in Sit Emerging's long position.| Saat Market vs. Morningstar Aggressive Growth | Saat Market vs. Aqr Risk Balanced Modities | Saat Market vs. Western Asset High | Saat Market vs. Federated Institutional High |
| Sit Emerging vs. Pear Tree Polaris | Sit Emerging vs. Artisan High Income | Sit Emerging vs. HUMANA INC | Sit Emerging vs. Aquagold International |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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