Correlation Between Saat Market and Sdit Gnma

Can any of the company-specific risk be diversified away by investing in both Saat Market and Sdit Gnma 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 Sdit Gnma 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 Sdit Gnma Fund, you can compare the effects of market volatilities on Saat Market and Sdit Gnma 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 Sdit Gnma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saat Market and Sdit Gnma.

Diversification Opportunities for Saat Market and Sdit Gnma

0.05

Correlation Coefficient

Saat Market  Sdit Gnma

Significant diversification

The 3 months correlation between Saat and Sdit is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Saat Market Growth and Sdit Gnma Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sdit Gnma Fund 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 Sdit Gnma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sdit Gnma Fund has no effect on the direction of Saat Market i.e., Saat Market and Sdit Gnma go up and down completely randomly.

Pair Corralation between Saat Market and Sdit Gnma

Assuming the 90 days horizon Saat Market Growth is expected to under-perform the Sdit Gnma. In addition to that, Saat Market is 2.13 times more volatile than Sdit Gnma Fund. It trades about -0.09 of its total potential returns per unit of risk. Sdit Gnma Fund is currently generating about -0.16 per unit of volatility. If you would invest  917.00  in Sdit Gnma Fund on September 19, 2024 and sell it today you would lose (26.00) from holding Sdit Gnma Fund or give up 2.84% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Saat Market Growth  vs.  Sdit Gnma Fund

Saat Market Growth

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Saat Market Growth has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Saat Market is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Sdit Gnma Fund

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sdit Gnma Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong primary indicators, Sdit Gnma is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Saat Market and Sdit Gnma

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

The idea behind Saat Market Growth and Sdit Gnma Fund 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.

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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.