Correlation Between Satrix Resi and Sabvest Capital

Can any of the company-specific risk be diversified away by investing in both Satrix Resi and Sabvest Capital 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 Satrix Resi and Sabvest Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Satrix Resi ETF and Sabvest Capital, you can compare the effects of market volatilities on Satrix Resi and Sabvest Capital 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 Satrix Resi with a short position of Sabvest Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Satrix Resi and Sabvest Capital.

Diversification Opportunities for Satrix Resi and Sabvest Capital

-0.41

Correlation Coefficient

Satrix Resi  Sabvest Capital

Very good diversification

The 3 months correlation between Satrix and Sabvest is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Satrix Resi ETF and Sabvest Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sabvest Capital and Satrix Resi 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 Satrix Resi ETF are associated (or correlated) with Sabvest Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sabvest Capital has no effect on the direction of Satrix Resi i.e., Satrix Resi and Sabvest Capital go up and down completely randomly.

Pair Corralation between Satrix Resi and Sabvest Capital

Assuming the 90 days trading horizon Satrix Resi ETF is expected to generate 0.89 times more return on investment than Sabvest Capital. However, Satrix Resi ETF is 1.13 times less risky than Sabvest Capital. It trades about 0.25 of its potential returns per unit of risk. Sabvest Capital is currently generating about 0.0 per unit of risk. If you would invest  555,899  in Satrix Resi ETF on December 24, 2024 and sell it today you would earn a total of  161,601  from holding Satrix Resi ETF or generate 29.07% return on investment over 90 days.

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

Satrix Resi ETF  vs.  Sabvest Capital

Satrix Resi ETF

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Satrix Resi ETF are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Satrix Resi sustained solid returns over the last few months and may actually be approaching a breakup point.

Sabvest Capital

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sabvest Capital has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Sabvest Capital is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Satrix Resi and Sabvest Capital

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

The idea behind Satrix Resi ETF and Sabvest Capital 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.