Correlation Between Vanguard Emerging and Saat Defensive
Can any of the company-specific risk be diversified away by investing in both Vanguard Emerging and Saat Defensive 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 Vanguard Emerging and Saat Defensive into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Emerging Markets and Saat Defensive Strategy, you can compare the effects of market volatilities on Vanguard Emerging and Saat Defensive 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 Vanguard Emerging with a short position of Saat Defensive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Emerging and Saat Defensive.
Diversification Opportunities for Vanguard Emerging and Saat Defensive
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Vanguard and Saat is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Emerging Markets and Saat Defensive Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saat Defensive Strategy and Vanguard Emerging 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 Vanguard Emerging Markets are associated (or correlated) with Saat Defensive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saat Defensive Strategy has no effect on the direction of Vanguard Emerging i.e., Vanguard Emerging and Saat Defensive go up and down completely randomly.
Pair Corralation between Vanguard Emerging and Saat Defensive
Assuming the 90 days horizon Vanguard Emerging Markets is expected to generate 2.3 times more return on investment than Saat Defensive. However, Vanguard Emerging is 2.3 times more volatile than Saat Defensive Strategy. It trades about 0.12 of its potential returns per unit of risk. Saat Defensive Strategy is currently generating about 0.16 per unit of risk. If you would invest 2,157 in Vanguard Emerging Markets on November 3, 2024 and sell it today you would earn a total of 190.00 from holding Vanguard Emerging Markets or generate 8.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Emerging Markets vs. Saat Defensive Strategy
Performance |
| Timeline |
| Vanguard Emerging Markets |
| Saat Defensive Strategy |
Vanguard Emerging and Saat Defensive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Emerging and Saat Defensive
The main advantage of trading using opposite Vanguard Emerging and Saat Defensive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Emerging position performs unexpectedly, Saat Defensive 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 Defensive will offset losses from the drop in Saat Defensive's long position.| Vanguard Emerging vs. The Gabelli Healthcare | Vanguard Emerging vs. Health Care Ultrasector | Vanguard Emerging vs. Live Oak Health | Vanguard Emerging vs. Tekla Healthcare Investors |
| Saat Defensive vs. Saat Tax Managed Aggressive | Saat Defensive vs. Saat Market Growth | Saat Defensive vs. Saat Aggressive Strategy | Saat Defensive vs. Saat Aggressive Strategy |
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.
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance |