Correlation Between Sarofim Equity and Transamerica Multi

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

By analyzing existing cross correlation between Sarofim Equity and Transamerica Multi Cap Growth, you can compare the effects of market volatilities on Sarofim Equity and Transamerica Multi 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 Sarofim Equity with a short position of Transamerica Multi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sarofim Equity and Transamerica Multi.

Diversification Opportunities for Sarofim Equity and Transamerica Multi

0.0

Correlation Coefficient

Sarofim Equity  Transamerica Multi

Pay attention - limited upside

The 3 months correlation between Sarofim and Transamerica is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Sarofim Equity and Transamerica Multi Cap Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transamerica Multi Cap and Sarofim Equity 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 Sarofim Equity are associated (or correlated) with Transamerica Multi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transamerica Multi Cap has no effect on the direction of Sarofim Equity i.e., Sarofim Equity and Transamerica Multi go up and down completely randomly.

Pair Corralation between Sarofim Equity and Transamerica Multi

If you would invest (100.00) in Transamerica Multi Cap Growth on December 25, 2024 and sell it today you would earn a total of  100.00  from holding Transamerica Multi Cap Growth or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Sarofim Equity  vs.  Transamerica Multi Cap Growth

Sarofim Equity

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sarofim Equity has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong primary indicators, Sarofim Equity is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Transamerica Multi Cap

Risk-Adjusted Performance

Very Weak

Over the last 90 days Transamerica Multi Cap Growth has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Transamerica Multi is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Sarofim Equity and Transamerica Multi

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

The idea behind Sarofim Equity and Transamerica Multi Cap Growth 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.