Correlation Between Saat E and Pro-blend(r) Maximum

Can any of the company-specific risk be diversified away by investing in both Saat E and Pro-blend(r) Maximum 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 Saat E and Pro-blend(r) Maximum into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Saat E Market and Pro Blend Maximum Term, you can compare the effects of market volatilities on Saat E and Pro-blend(r) Maximum 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 Saat E with a short position of Pro-blend(r) Maximum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saat E and Pro-blend(r) Maximum.

Diversification Opportunities for Saat E and Pro-blend(r) Maximum

0.93

Correlation Coefficient

Saat E  Pro-blend(r) Maximum

Almost no diversification

The 3 months correlation between Saat and Pro-blend(r) is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Saat E Market and Pro Blend Maximum Term in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pro-blend(r) Maximum and Saat E 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 Saat E Market are associated (or correlated) with Pro-blend(r) Maximum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pro-blend(r) Maximum has no effect on the direction of Saat E i.e., Saat E and Pro-blend(r) Maximum go up and down completely randomly.

Pair Corralation between Saat E and Pro-blend(r) Maximum

Assuming the 90 days horizon Saat E Market is expected to generate 0.96 times more return on investment than Pro-blend(r) Maximum. However, Saat E Market is 1.04 times less risky than Pro-blend(r) Maximum. It trades about 0.22 of its potential returns per unit of risk. Pro Blend Maximum Term is currently generating about 0.08 per unit of risk. If you would invest  1,962  in Saat E Market on October 24, 2024 and sell it today you would earn a total of  52.00  from holding Saat E Market or generate 2.65% return on investment over 90 days.

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

Saat E Market  vs.  Pro Blend Maximum Term

Saat E Market

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Saat E Market has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pro-blend(r) Maximum

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pro Blend Maximum Term has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, Pro-blend(r) Maximum is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Saat E and Pro-blend(r) Maximum

The main advantage of trading using opposite Saat E and Pro-blend(r) Maximum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saat E position performs unexpectedly, Pro-blend(r) Maximum 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 Pro-blend(r) Maximum will offset losses from the drop in Pro-blend(r) Maximum's long position.

The idea behind Saat E Market and Pro Blend Maximum Term 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..