Correlation Between Sabvest Capital and Satrix Resi

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

By analyzing existing cross correlation between Sabvest Capital and Satrix Resi ETF, you can compare the effects of market volatilities on Sabvest Capital and Satrix Resi 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 Sabvest Capital with a short position of Satrix Resi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sabvest Capital and Satrix Resi.

Diversification Opportunities for Sabvest Capital and Satrix Resi

-0.62

Correlation Coefficient

Sabvest Capital  Satrix Resi

Excellent diversification

The 3 months correlation between Sabvest and Satrix is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Sabvest Capital and Satrix Resi ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Satrix Resi ETF and Sabvest Capital 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 Sabvest Capital are associated (or correlated) with Satrix Resi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Satrix Resi ETF has no effect on the direction of Sabvest Capital i.e., Sabvest Capital and Satrix Resi go up and down completely randomly.

Pair Corralation between Sabvest Capital and Satrix Resi

Assuming the 90 days trading horizon Sabvest Capital is expected to under-perform the Satrix Resi. In addition to that, Sabvest Capital is 1.47 times more volatile than Satrix Resi ETF. It trades about -0.16 of its total potential returns per unit of risk. Satrix Resi ETF is currently generating about -0.14 per unit of volatility. If you would invest  594,500  in Satrix Resi ETF on October 10, 2024 and sell it today you would lose (22,000) from holding Satrix Resi ETF or give up 3.7% of portfolio value over 90 days.

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

Sabvest Capital  vs.  Satrix Resi ETF

Sabvest Capital

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Sabvest Capital are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Sabvest Capital may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Satrix Resi ETF

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Satrix Resi ETF has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Satrix Resi is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Sabvest Capital and Satrix Resi

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

The idea behind Sabvest Capital and Satrix Resi ETF 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.