Correlation Between Saat Defensive and Saat Core
Can any of the company-specific risk be diversified away by investing in both Saat Defensive and Saat Core 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 Saat Core 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 Saat E Market, you can compare the effects of market volatilities on Saat Defensive and Saat Core 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 Saat Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saat Defensive and Saat Core.
Diversification Opportunities for Saat Defensive and Saat Core
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Saat and Saat is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Saat Defensive Strategy and Saat E Market in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saat E Market 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 Saat Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saat E Market has no effect on the direction of Saat Defensive i.e., Saat Defensive and Saat Core go up and down completely randomly.
Pair Corralation between Saat Defensive and Saat Core
Assuming the 90 days horizon Saat Defensive is expected to generate 6.11 times less return on investment than Saat Core. But when comparing it to its historical volatility, Saat Defensive Strategy is 11.1 times less risky than Saat Core. It trades about 0.54 of its potential returns per unit of risk. Saat E Market is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 1,951 in Saat E Market on November 1, 2024 and sell it today you would earn a total of 68.00 from holding Saat E Market or generate 3.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Saat Defensive Strategy vs. Saat E Market
Performance |
| Timeline |
| Saat Defensive Strategy |
| Saat E Market |
Saat Defensive and Saat Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Saat Defensive and Saat Core
The main advantage of trading using opposite Saat Defensive and Saat Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saat Defensive position performs unexpectedly, Saat Core 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 Core will offset losses from the drop in Saat Core's long position.| Saat Defensive vs. Fidelity Managed Retirement | Saat Defensive vs. American Funds Retirement | Saat Defensive vs. Great West Moderately Aggressive | Saat Defensive vs. Transamerica Cleartrack Retirement |
| Saat Core vs. Saat Tax Managed Aggressive | Saat Core vs. Saat Market Growth | Saat Core vs. Saat Moderate Strategy | Saat Core vs. Simt Tax Managed Managed |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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