Correlation Between Sa International and Sa Emerging
Can any of the company-specific risk be diversified away by investing in both Sa International and Sa Emerging 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 Sa International and Sa Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sa International Value and Sa Emerging Markets, you can compare the effects of market volatilities on Sa International and Sa Emerging 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 Sa International with a short position of Sa Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sa International and Sa Emerging.
Diversification Opportunities for Sa International and Sa Emerging
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SAHMX and SAEMX is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Sa International Value and Sa Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sa Emerging Markets and Sa International 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 Sa International Value are associated (or correlated) with Sa Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sa Emerging Markets has no effect on the direction of Sa International i.e., Sa International and Sa Emerging go up and down completely randomly.
Pair Corralation between Sa International and Sa Emerging
Assuming the 90 days horizon Sa International Value is expected to generate 1.0 times more return on investment than Sa Emerging. However, Sa International is 1.0 times more volatile than Sa Emerging Markets. It trades about 0.05 of its potential returns per unit of risk. Sa Emerging Markets is currently generating about -0.14 per unit of risk. If you would invest 1,364 in Sa International Value on September 9, 2024 and sell it today you would earn a total of 8.00 from holding Sa International Value or generate 0.59% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Sa International Value vs. Sa Emerging Markets
Performance |
Timeline |
Sa International Value |
Sa Emerging Markets |
Sa International and Sa Emerging Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Sa International and Sa Emerging
The main advantage of trading using opposite Sa International and Sa Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sa International position performs unexpectedly, Sa Emerging 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 Sa Emerging will offset losses from the drop in Sa Emerging's long position.The idea behind Sa International Value and Sa Emerging Markets 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.
Sa Emerging vs. Blackrock High Yield | Sa Emerging vs. Pace High Yield | Sa Emerging vs. Pia High Yield | Sa Emerging vs. Lord Abbett High |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
Other Complementary Tools
Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity |