Correlation Between Saat Market and Siit World

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

Diversification Opportunities for Saat Market and Siit World

0.33
  Correlation Coefficient

Weak diversification

The 3 months correlation between Saat and Siit is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Saat Market Growth and Siit World Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siit World Equity 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 Siit World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siit World Equity has no effect on the direction of Saat Market i.e., Saat Market and Siit World go up and down completely randomly.

Pair Corralation between Saat Market and Siit World

Assuming the 90 days horizon Saat Market is expected to generate 1.19 times less return on investment than Siit World. But when comparing it to its historical volatility, Saat Market Growth is 1.59 times less risky than Siit World. It trades about 0.1 of its potential returns per unit of risk. Siit World Equity is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  1,000.00  in Siit World Equity on September 12, 2024 and sell it today you would earn a total of  297.00  from holding Siit World Equity or generate 29.7% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy99.8%
ValuesDaily Returns

Saat Market Growth  vs.  Siit World Equity

 Performance 
       Timeline  
Saat Market Growth 

Risk-Adjusted Performance

11 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Saat Market Growth are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. 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.
Siit World Equity 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Siit World Equity are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Siit World is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Saat Market and Siit World Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Saat Market and Siit World

The main advantage of trading using opposite Saat Market and Siit World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saat Market position performs unexpectedly, Siit World 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 Siit World will offset losses from the drop in Siit World's long position.
The idea behind Saat Market Growth and Siit World Equity 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.
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.

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