Correlation Between Saat Market and Long Term
Can any of the company-specific risk be diversified away by investing in both Saat Market and Long Term 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 Market and Long Term into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Saat Market Growth and Long Term Government Fund, you can compare the effects of market volatilities on Saat Market and Long Term 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 Market with a short position of Long Term. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saat Market and Long Term.
Diversification Opportunities for Saat Market and Long Term
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Saat and Long is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Saat Market Growth and Long Term Government Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Long Term Government and Saat Market 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 Market Growth are associated (or correlated) with Long Term. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Long Term Government has no effect on the direction of Saat Market i.e., Saat Market and Long Term go up and down completely randomly.
Pair Corralation between Saat Market and Long Term
Assuming the 90 days horizon Saat Market Growth is expected to generate 1.67 times more return on investment than Long Term. However, Saat Market is 1.67 times more volatile than Long Term Government Fund. It trades about -0.3 of its potential returns per unit of risk. Long Term Government Fund is currently generating about -0.57 per unit of risk. If you would invest 1,304 in Saat Market Growth on October 11, 2024 and sell it today you would lose (73.00) from holding Saat Market Growth or give up 5.6% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 95.24% |
Values | Daily Returns |
Saat Market Growth vs. Long Term Government Fund
Performance |
Timeline |
Saat Market Growth |
Long Term Government |
Saat Market and Long Term Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Saat Market and Long Term
The main advantage of trading using opposite Saat Market and Long Term positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saat Market position performs unexpectedly, Long Term 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 Long Term will offset losses from the drop in Long Term's long position.Saat Market vs. Simt Multi Asset Accumulation | Saat Market vs. Simt Real Return | Saat Market vs. Simt Small Cap | Saat Market vs. Siit Screened World |
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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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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