Correlation Between Saat Defensive and Catholic Values

Can any of the company-specific risk be diversified away by investing in both Saat Defensive and Catholic Values 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 Defensive and Catholic Values into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Saat Defensive Strategy and Catholic Values Fixed, you can compare the effects of market volatilities on Saat Defensive and Catholic Values 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 Defensive with a short position of Catholic Values. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saat Defensive and Catholic Values.

Diversification Opportunities for Saat Defensive and Catholic Values

-0.64

Correlation Coefficient

Saat Defensive  Catholic Values

Excellent diversification

The 3 months correlation between Saat and Catholic is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Saat Defensive Strategy and Catholic Values Fixed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catholic Values Fixed and Saat Defensive 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 Defensive Strategy are associated (or correlated) with Catholic Values. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catholic Values Fixed has no effect on the direction of Saat Defensive i.e., Saat Defensive and Catholic Values go up and down completely randomly.

Pair Corralation between Saat Defensive and Catholic Values

Assuming the 90 days horizon Saat Defensive Strategy is expected to generate 0.1 times more return on investment than Catholic Values. However, Saat Defensive Strategy is 9.72 times less risky than Catholic Values. It trades about 0.47 of its potential returns per unit of risk. Catholic Values Fixed is currently generating about -0.12 per unit of risk. If you would invest  1,122  in Saat Defensive Strategy on September 21, 2024 and sell it today you would earn a total of  4.00  from holding Saat Defensive Strategy or generate 0.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.45%
Values	Daily Returns

Saat Defensive Strategy  vs.  Catholic Values Fixed

Saat Defensive Strategy

Risk-Adjusted Performance

29 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Saat Defensive Strategy are ranked lower than 29 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Saat Defensive is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Catholic Values Fixed

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Catholic Values Fixed has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Catholic Values 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 Defensive and Catholic Values

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

The idea behind Saat Defensive Strategy and Catholic Values Fixed 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.