Correlation Between Stet California and Saat Conservative
Can any of the company-specific risk be diversified away by investing in both Stet California and Saat Conservative 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 Stet California and Saat Conservative into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stet California Municipal and Saat Servative Strategy, you can compare the effects of market volatilities on Stet California and Saat Conservative 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 Stet California with a short position of Saat Conservative. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stet California and Saat Conservative.
Diversification Opportunities for Stet California and Saat Conservative
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Stet and SAAT is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Stet California Municipal and Saat Servative Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saat Servative Strategy and Stet California 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 Stet California Municipal are associated (or correlated) with Saat Conservative. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saat Servative Strategy has no effect on the direction of Stet California i.e., Stet California and Saat Conservative go up and down completely randomly.
Pair Corralation between Stet California and Saat Conservative
Assuming the 90 days horizon Stet California is expected to generate 2.35 times less return on investment than Saat Conservative. In addition to that, Stet California is 1.08 times more volatile than Saat Servative Strategy. It trades about 0.14 of its total potential returns per unit of risk. Saat Servative Strategy is currently generating about 0.35 per unit of volatility. If you would invest 1,047 in Saat Servative Strategy on December 2, 2024 and sell it today you would earn a total of 27.00 from holding Saat Servative Strategy or generate 2.58% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Stet California Municipal vs. Saat Servative Strategy
Performance |
Timeline |
Stet California Municipal |
Saat Servative Strategy |
Stet California and Saat Conservative Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Stet California and Saat Conservative
The main advantage of trading using opposite Stet California and Saat Conservative positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stet California position performs unexpectedly, Saat Conservative 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 Saat Conservative will offset losses from the drop in Saat Conservative's long position.Stet California vs. Artisan Developing World | Stet California vs. Commodities Strategy Fund | Stet California vs. Wasatch Frontier Emerging | Stet California vs. Barings Emerging Markets |
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Check out your portfolio center.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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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