Correlation Between Sa Real and Great West

Can any of the company-specific risk be diversified away by investing in both Sa Real and Great West 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 Sa Real and Great West into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Sa Real Estate and Great West International Index, you can compare the effects of market volatilities on Sa Real and Great West 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 Sa Real with a short position of Great West. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sa Real and Great West.

Diversification Opportunities for Sa Real and Great West

0.48

Correlation Coefficient

Sa Real  Great West

Very weak diversification

The 3 months correlation between SAREX and Great is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Sa Real Estate and Great West International Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great West Internati and Sa Real 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 Sa Real Estate are associated (or correlated) with Great West. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great West Internati has no effect on the direction of Sa Real i.e., Sa Real and Great West go up and down completely randomly.

Pair Corralation between Sa Real and Great West

Assuming the 90 days horizon Sa Real Estate is expected to generate 0.94 times more return on investment than Great West. However, Sa Real Estate is 1.06 times less risky than Great West. It trades about 0.03 of its potential returns per unit of risk. Great West International Index is currently generating about 0.01 per unit of risk. If you would invest  1,229  in Sa Real Estate on September 12, 2024 and sell it today you would earn a total of  4.00  from holding Sa Real Estate or generate 0.33% return on investment over 90 days.

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

Sa Real Estate  vs.  Great West International Index

Sa Real Estate

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sa Real Estate has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Sa Real is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Great West Internati

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Great West International Index has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Great West is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Sa Real and Great West

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

The idea behind Sa Real Estate and Great West International Index 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.