Correlation Between Ridgeworth Silvant and Selected American

Can any of the company-specific risk be diversified away by investing in both Ridgeworth Silvant and Selected American 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 Ridgeworth Silvant and Selected American into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ridgeworth Silvant Large and Selected American Shares, you can compare the effects of market volatilities on Ridgeworth Silvant and Selected American 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 Ridgeworth Silvant with a short position of Selected American. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ridgeworth Silvant and Selected American.

Diversification Opportunities for Ridgeworth Silvant and Selected American

0.03

Correlation Coefficient

Ridgeworth Silvant  Selected American

Significant diversification

The 3 months correlation between Ridgeworth and Selected is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Ridgeworth Silvant Large and Selected American Shares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Selected American Shares and Ridgeworth Silvant 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 Ridgeworth Silvant Large are associated (or correlated) with Selected American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Selected American Shares has no effect on the direction of Ridgeworth Silvant i.e., Ridgeworth Silvant and Selected American go up and down completely randomly.

Pair Corralation between Ridgeworth Silvant and Selected American

Assuming the 90 days horizon Ridgeworth Silvant Large is expected to generate 0.95 times more return on investment than Selected American. However, Ridgeworth Silvant Large is 1.06 times less risky than Selected American. It trades about 0.13 of its potential returns per unit of risk. Selected American Shares is currently generating about 0.03 per unit of risk. If you would invest  818.00  in Ridgeworth Silvant Large on September 27, 2024 and sell it today you would earn a total of  811.00  from holding Ridgeworth Silvant Large or generate 99.14% return on investment over 90 days.

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

Ridgeworth Silvant Large  vs.  Selected American Shares

Ridgeworth Silvant Large

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ridgeworth Silvant Large are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Ridgeworth Silvant may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Selected American Shares

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Selected American Shares 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.

Pair Trading with Ridgeworth Silvant and Selected American

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

The idea behind Ridgeworth Silvant Large and Selected American Shares 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..