Correlation Between Saba Closed and FT Cboe

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Can any of the company-specific risk be diversified away by investing in both Saba Closed and FT Cboe 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 Saba Closed and FT Cboe into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Saba Closed End Funds and FT Cboe Vest, you can compare the effects of market volatilities on Saba Closed and FT Cboe 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 Saba Closed with a short position of FT Cboe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saba Closed and FT Cboe.

Diversification Opportunities for Saba Closed and FT Cboe

0.81
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Saba and DNOV is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Saba Closed End Funds and FT Cboe Vest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FT Cboe Vest and Saba Closed 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 Saba Closed End Funds are associated (or correlated) with FT Cboe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FT Cboe Vest has no effect on the direction of Saba Closed i.e., Saba Closed and FT Cboe go up and down completely randomly.

Pair Corralation between Saba Closed and FT Cboe

Given the investment horizon of 90 days Saba Closed End Funds is expected to generate 1.71 times more return on investment than FT Cboe. However, Saba Closed is 1.71 times more volatile than FT Cboe Vest. It trades about 0.12 of its potential returns per unit of risk. FT Cboe Vest is currently generating about 0.13 per unit of risk. If you would invest  1,462  in Saba Closed End Funds on September 5, 2024 and sell it today you would earn a total of  783.00  from holding Saba Closed End Funds or generate 53.56% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

Saba Closed End Funds  vs.  FT Cboe Vest

 Performance 
       Timeline  
Saba Closed End 

Risk-Adjusted Performance

11 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Saba Closed End Funds are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical and fundamental indicators, Saba Closed is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.
FT Cboe Vest 

Risk-Adjusted Performance

33 of 100

 
Weak
 
Strong
Very Strong
Compared to the overall equity markets, risk-adjusted returns on investments in FT Cboe Vest are ranked lower than 33 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, FT Cboe is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Saba Closed and FT Cboe Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Saba Closed and FT Cboe

The main advantage of trading using opposite Saba Closed and FT Cboe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saba Closed position performs unexpectedly, FT Cboe 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 FT Cboe will offset losses from the drop in FT Cboe's long position.
The idea behind Saba Closed End Funds and FT Cboe Vest 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..

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