Correlation Between Saat Defensive and Simt Large
Can any of the company-specific risk be diversified away by investing in both Saat Defensive and Simt Large 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 Simt Large 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 Simt Large Cap, you can compare the effects of market volatilities on Saat Defensive and Simt Large 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 Simt Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saat Defensive and Simt Large.
Diversification Opportunities for Saat Defensive and Simt Large
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Saat and Simt is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Saat Defensive Strategy and Simt Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simt Large Cap 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 Simt Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simt Large Cap has no effect on the direction of Saat Defensive i.e., Saat Defensive and Simt Large go up and down completely randomly.
Pair Corralation between Saat Defensive and Simt Large
Assuming the 90 days horizon Saat Defensive is expected to generate 2.21 times less return on investment than Simt Large. But when comparing it to its historical volatility, Saat Defensive Strategy is 12.76 times less risky than Simt Large. It trades about 0.38 of its potential returns per unit of risk. Simt Large Cap is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 2,460 in Simt Large Cap on August 26, 2024 and sell it today you would earn a total of 416.00 from holding Simt Large Cap or generate 16.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Saat Defensive Strategy vs. Simt Large Cap
Performance |
| Timeline |
| Saat Defensive Strategy |
| Simt Large Cap |
Saat Defensive and Simt Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Saat Defensive and Simt Large
The main advantage of trading using opposite Saat Defensive and Simt Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saat Defensive position performs unexpectedly, Simt Large 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 Simt Large will offset losses from the drop in Simt Large's long position.| Saat Defensive vs. Ubs Money Series | Saat Defensive vs. Rbc Funds Trust | Saat Defensive vs. Pioneer Money Market | Saat Defensive vs. Aim Investment Secs |
| Simt Large vs. Aqr Large Cap | Simt Large vs. Nuveen Winslow Large Cap | Simt Large vs. Siit Large Cap | Simt Large vs. Goldman Sachs Large |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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