Correlation Between Saat Defensive and Stet California
Can any of the company-specific risk be diversified away by investing in both Saat Defensive and Stet California 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 Stet California 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 Stet California Municipal, you can compare the effects of market volatilities on Saat Defensive and Stet California 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 Stet California. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saat Defensive and Stet California.
Diversification Opportunities for Saat Defensive and Stet California
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Saat and Stet is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Saat Defensive Strategy and Stet California Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stet California Municipal 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 Stet California. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stet California Municipal has no effect on the direction of Saat Defensive i.e., Saat Defensive and Stet California go up and down completely randomly.
Pair Corralation between Saat Defensive and Stet California
Assuming the 90 days horizon Saat Defensive is expected to generate 1.4 times less return on investment than Stet California. But when comparing it to its historical volatility, Saat Defensive Strategy is 6.78 times less risky than Stet California. It trades about 0.46 of its potential returns per unit of risk. Stet California Municipal is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,015 in Stet California Municipal on August 26, 2024 and sell it today you would earn a total of 5.00 from holding Stet California Municipal or generate 0.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Saat Defensive Strategy vs. Stet California Municipal
Performance |
| Timeline |
| Saat Defensive Strategy |
| Stet California Municipal |
Saat Defensive and Stet California Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Saat Defensive and Stet California
The main advantage of trading using opposite Saat Defensive and Stet California positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saat Defensive position performs unexpectedly, Stet California 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 Stet California will offset losses from the drop in Stet California's long position.| Saat Defensive vs. Pender Real Estate | Saat Defensive vs. Franklin Real Estate | Saat Defensive vs. Prudential Real Estate | Saat Defensive vs. Simt Real Estate |
| Stet California vs. Simt Multi Asset Accumulation | Stet California vs. Saat Market Growth | Stet California vs. Simt Real Return | Stet California vs. Simt Small Cap |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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