Correlation Between Sa Worldwide and Invesco International

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

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

Diversification Opportunities for Sa Worldwide and Invesco International

0.34

Correlation Coefficient

Sa Worldwide  Invesco International

Weak diversification

The 3 months correlation between SAWMX and Invesco is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Sa Worldwide Moderate and Invesco International Diversif in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco International and Sa Worldwide 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 Worldwide Moderate are associated (or correlated) with Invesco International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco International has no effect on the direction of Sa Worldwide i.e., Sa Worldwide and Invesco International go up and down completely randomly.

Pair Corralation between Sa Worldwide and Invesco International

Assuming the 90 days horizon Sa Worldwide Moderate is expected to generate 0.32 times more return on investment than Invesco International. However, Sa Worldwide Moderate is 3.16 times less risky than Invesco International. It trades about -0.27 of its potential returns per unit of risk. Invesco International Diversified is currently generating about -0.22 per unit of risk. If you would invest  1,245  in Sa Worldwide Moderate on September 27, 2024 and sell it today you would lose (31.00) from holding Sa Worldwide Moderate or give up 2.49% of portfolio value over 90 days.

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

Sa Worldwide Moderate  vs.  Invesco International Diversif

Sa Worldwide Moderate

Risk-Adjusted Performance

0 of 100

Very Weak

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

Invesco International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Invesco International Diversified has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's technical and fundamental indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Sa Worldwide and Invesco International

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

The idea behind Sa Worldwide Moderate and Invesco International Diversified 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.