Correlation Between Schroder Asian and Sanlam Global

Can any of the company-specific risk be diversified away by investing in both Schroder Asian and Sanlam Global 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 Schroder Asian and Sanlam Global into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Schroder Asian Alpha and Sanlam Global Artificial, you can compare the effects of market volatilities on Schroder Asian and Sanlam Global 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 Schroder Asian with a short position of Sanlam Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Schroder Asian and Sanlam Global.

Diversification Opportunities for Schroder Asian and Sanlam Global

0.64

Correlation Coefficient

Schroder Asian  Sanlam Global

Poor diversification

The 3 months correlation between Schroder and Sanlam is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Schroder Asian Alpha and Sanlam Global Artificial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sanlam Global Artificial and Schroder Asian 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 Schroder Asian Alpha are associated (or correlated) with Sanlam Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sanlam Global Artificial has no effect on the direction of Schroder Asian i.e., Schroder Asian and Sanlam Global go up and down completely randomly.

Pair Corralation between Schroder Asian and Sanlam Global

Assuming the 90 days trading horizon Schroder Asian Alpha is expected to generate 0.67 times more return on investment than Sanlam Global. However, Schroder Asian Alpha is 1.48 times less risky than Sanlam Global. It trades about -0.01 of its potential returns per unit of risk. Sanlam Global Artificial is currently generating about -0.13 per unit of risk. If you would invest  142.00  in Schroder Asian Alpha on December 29, 2024 and sell it today you would lose (1.00) from holding Schroder Asian Alpha or give up 0.7% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Schroder Asian Alpha  vs.  Sanlam Global Artificial

Schroder Asian Alpha

Risk-Adjusted Performance

Very Weak

Over the last 90 days Schroder Asian Alpha has generated negative risk-adjusted returns adding no value to fund investors. In spite of comparatively stable basic indicators, Schroder Asian is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Sanlam Global Artificial

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sanlam Global Artificial has generated negative risk-adjusted returns adding no value to fund investors. Even with latest weak performance, the Fund's technical and fundamental indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the fund retail investors.

Pair Trading with Schroder Asian and Sanlam Global

The main advantage of trading using opposite Schroder Asian and Sanlam Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Schroder Asian position performs unexpectedly, Sanlam Global 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 Sanlam Global will offset losses from the drop in Sanlam Global's long position.

The idea behind Schroder Asian Alpha and Sanlam Global Artificial pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.