Correlation Between Saat Aggressive and Saat Defensive
Can any of the company-specific risk be diversified away by investing in both Saat Aggressive and Saat Defensive 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 Aggressive and Saat Defensive into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Saat Aggressive Strategy and Saat Defensive Strategy, you can compare the effects of market volatilities on Saat Aggressive and Saat Defensive 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 Aggressive with a short position of Saat Defensive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saat Aggressive and Saat Defensive.
Diversification Opportunities for Saat Aggressive and Saat Defensive
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Saat and Saat is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Saat Aggressive Strategy and Saat Defensive Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saat Defensive Strategy and Saat Aggressive 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 Aggressive Strategy are associated (or correlated) with Saat Defensive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saat Defensive Strategy has no effect on the direction of Saat Aggressive i.e., Saat Aggressive and Saat Defensive go up and down completely randomly.
Pair Corralation between Saat Aggressive and Saat Defensive
Assuming the 90 days horizon Saat Aggressive Strategy is expected to generate 10.13 times more return on investment than Saat Defensive. However, Saat Aggressive is 10.13 times more volatile than Saat Defensive Strategy. It trades about 0.1 of its potential returns per unit of risk. Saat Defensive Strategy is currently generating about 0.39 per unit of risk. If you would invest 1,234 in Saat Aggressive Strategy on August 31, 2024 and sell it today you would earn a total of 281.00 from holding Saat Aggressive Strategy or generate 22.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Saat Aggressive Strategy vs. Saat Defensive Strategy
Performance |
| Timeline |
| Saat Aggressive Strategy |
| Saat Defensive Strategy |
Saat Aggressive and Saat Defensive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Saat Aggressive and Saat Defensive
The main advantage of trading using opposite Saat Aggressive and Saat Defensive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saat Aggressive position performs unexpectedly, Saat Defensive 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 Saat Defensive will offset losses from the drop in Saat Defensive's long position.| Saat Aggressive vs. Saat Market Growth | Saat Aggressive vs. Saat Moderate Strategy | Saat Aggressive vs. Saat Servative Strategy | Saat Aggressive vs. Simt Large Cap |
| Saat Defensive vs. T Rowe Price | Saat Defensive vs. The National Tax Free | Saat Defensive vs. Ishares Municipal Bond | Saat Defensive vs. Ab Impact Municipal |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
Other Complementary Tools
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity |