Correlation Between SF Sustainable and CSIF III

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

By analyzing existing cross correlation between SF Sustainable Property and CSIF III Equity, you can compare the effects of market volatilities on SF Sustainable and CSIF III 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 SF Sustainable with a short position of CSIF III. Check out your portfolio center. Please also check ongoing floating volatility patterns of SF Sustainable and CSIF III.

Diversification Opportunities for SF Sustainable and CSIF III

-0.15

Correlation Coefficient

SF Sustainable  CSIF III

Good diversification

The 3 months correlation between SFPF and CSIF is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding SF Sustainable Property and CSIF III Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSIF III Equity and SF Sustainable 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 SF Sustainable Property are associated (or correlated) with CSIF III. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSIF III Equity has no effect on the direction of SF Sustainable i.e., SF Sustainable and CSIF III go up and down completely randomly.

Pair Corralation between SF Sustainable and CSIF III

Assuming the 90 days trading horizon SF Sustainable Property is expected to generate 1.11 times more return on investment than CSIF III. However, SF Sustainable is 1.11 times more volatile than CSIF III Equity. It trades about 0.13 of its potential returns per unit of risk. CSIF III Equity is currently generating about -0.29 per unit of risk. If you would invest  12,650  in SF Sustainable Property on September 27, 2024 and sell it today you would earn a total of  300.00  from holding SF Sustainable Property or generate 2.37% return on investment over 90 days.

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

SF Sustainable Property  vs.  CSIF III Equity

SF Sustainable Property

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in SF Sustainable Property are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly stable basic indicators, SF Sustainable is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

CSIF III Equity

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in CSIF III Equity are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, CSIF III is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with SF Sustainable and CSIF III

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

The idea behind SF Sustainable Property and CSIF III Equity 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.