Correlation Between Sa Global and Sa Us

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

By analyzing existing cross correlation between Sa Global Fixed and Sa Mkt Fd, you can compare the effects of market volatilities on Sa Global and Sa Us 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 Global with a short position of Sa Us. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sa Global and Sa Us.

Diversification Opportunities for Sa Global and Sa Us

-0.37

Correlation Coefficient

Sa Global  Sa Us

Very good diversification

The 3 months correlation between SAXIX and SAMKX is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Sa Global Fixed and Sa Mkt Fd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sa Mkt Fd and Sa Global 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 Global Fixed are associated (or correlated) with Sa Us. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sa Mkt Fd has no effect on the direction of Sa Global i.e., Sa Global and Sa Us go up and down completely randomly.

Pair Corralation between Sa Global and Sa Us

Assuming the 90 days horizon Sa Global Fixed is expected to generate 0.14 times more return on investment than Sa Us. However, Sa Global Fixed is 7.01 times less risky than Sa Us. It trades about 0.15 of its potential returns per unit of risk. Sa Mkt Fd is currently generating about -0.05 per unit of risk. If you would invest  868.00  in Sa Global Fixed on December 28, 2024 and sell it today you would earn a total of  11.00  from holding Sa Global Fixed or generate 1.27% return on investment over 90 days.

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

Sa Global Fixed  vs.  Sa Mkt Fd

Sa Global Fixed

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sa Global Fixed are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Sa Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Sa Mkt Fd

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sa Mkt Fd has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward-looking signals, Sa Us 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 Global and Sa Us

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

The idea behind Sa Global Fixed and Sa Mkt Fd 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.