Correlation Between Saat Defensive and Highland Longshort
Can any of the company-specific risk be diversified away by investing in both Saat Defensive and Highland Longshort 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 Defensive and Highland Longshort into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Saat Defensive Strategy and Highland Longshort Healthcare, you can compare the effects of market volatilities on Saat Defensive and Highland Longshort 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 Defensive with a short position of Highland Longshort. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saat Defensive and Highland Longshort.
Diversification Opportunities for Saat Defensive and Highland Longshort
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Saat and Highland is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Saat Defensive Strategy and Highland Longshort Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Highland Longshort and Saat Defensive 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 Defensive Strategy are associated (or correlated) with Highland Longshort. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Highland Longshort has no effect on the direction of Saat Defensive i.e., Saat Defensive and Highland Longshort go up and down completely randomly.
Pair Corralation between Saat Defensive and Highland Longshort
Assuming the 90 days horizon Saat Defensive is expected to generate 1.5 times less return on investment than Highland Longshort. But when comparing it to its historical volatility, Saat Defensive Strategy is 3.08 times less risky than Highland Longshort. It trades about 0.39 of its potential returns per unit of risk. Highland Longshort Healthcare is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 1,464 in Highland Longshort Healthcare on September 2, 2024 and sell it today you would earn a total of 199.00 from holding Highland Longshort Healthcare or generate 13.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Saat Defensive Strategy vs. Highland Longshort Healthcare
Performance |
| Timeline |
| Saat Defensive Strategy |
| Highland Longshort |
Saat Defensive and Highland Longshort Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Saat Defensive and Highland Longshort
The main advantage of trading using opposite Saat Defensive and Highland Longshort positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saat Defensive position performs unexpectedly, Highland Longshort 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 Highland Longshort will offset losses from the drop in Highland Longshort's long position.| Saat Defensive vs. Blackrock Health Sciences | Saat Defensive vs. Prudential Health Sciences | Saat Defensive vs. Eventide Healthcare Life | Saat Defensive vs. Allianzgi Health Sciences |
| Highland Longshort vs. Fidelity Advisor Diversified | Highland Longshort vs. Adams Diversified Equity | Highland Longshort vs. Prudential Core Conservative | Highland Longshort vs. Jhancock Diversified Macro |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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