Correlation Between California Bond and Saat Core
Can any of the company-specific risk be diversified away by investing in both California Bond 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 California Bond and Saat Core into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between California Bond Fund and Saat E Market, you can compare the effects of market volatilities on California Bond 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 California Bond with a short position of Saat Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of California Bond and Saat Core.
Diversification Opportunities for California Bond and Saat Core
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between California and Saat is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding California Bond Fund 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 California Bond 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 California Bond Fund 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 California Bond i.e., California Bond and Saat Core go up and down completely randomly.
Pair Corralation between California Bond and Saat Core
Assuming the 90 days horizon California Bond Fund is expected to generate 0.92 times more return on investment than Saat Core. However, California Bond Fund is 1.09 times less risky than Saat Core. It trades about 0.27 of its potential returns per unit of risk. Saat E Market is currently generating about 0.14 per unit of risk. If you would invest 1,030 in California Bond Fund on August 30, 2024 and sell it today you would earn a total of 21.00 from holding California Bond Fund or generate 2.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
California Bond Fund vs. Saat E Market
Performance |
| Timeline |
| California Bond |
| Saat E Market |
California Bond and Saat Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with California Bond and Saat Core
The main advantage of trading using opposite California Bond and Saat Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if California Bond 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.| California Bond vs. Strategic Allocation Aggressive | California Bond vs. Lgm Risk Managed | California Bond vs. Goldman Sachs High | California Bond vs. Ab Global Risk |
| Saat Core vs. Maryland Tax Free Bond | Saat Core vs. Versatile Bond Portfolio | Saat Core vs. T Rowe Price | Saat Core vs. California Bond Fund |
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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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