Correlation Between Parametric Intl and Strategic Asset
Can any of the company-specific risk be diversified away by investing in both Parametric Intl and Strategic Asset 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 Parametric Intl and Strategic Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Parametric Intl Equity and Strategic Asset Management, you can compare the effects of market volatilities on Parametric Intl and Strategic Asset 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 Parametric Intl with a short position of Strategic Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Parametric Intl and Strategic Asset.
Diversification Opportunities for Parametric Intl and Strategic Asset
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Parametric and Strategic is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Parametric Intl Equity and Strategic Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strategic Asset Mana and Parametric Intl 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 Parametric Intl Equity are associated (or correlated) with Strategic Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strategic Asset Mana has no effect on the direction of Parametric Intl i.e., Parametric Intl and Strategic Asset go up and down completely randomly.
Pair Corralation between Parametric Intl and Strategic Asset
Assuming the 90 days horizon Parametric Intl is expected to generate 1.49 times less return on investment than Strategic Asset. In addition to that, Parametric Intl is 1.18 times more volatile than Strategic Asset Management. It trades about 0.14 of its total potential returns per unit of risk. Strategic Asset Management is currently generating about 0.24 per unit of volatility. If you would invest 2,291 in Strategic Asset Management on May 28, 2025 and sell it today you would earn a total of 195.00 from holding Strategic Asset Management or generate 8.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 98.41% |
| Values | Daily Returns |
Parametric Intl Equity vs. Strategic Asset Management
Performance |
| Timeline |
| Parametric Intl Equity |
| Strategic Asset Mana |
Parametric Intl and Strategic Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Parametric Intl and Strategic Asset
The main advantage of trading using opposite Parametric Intl and Strategic Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Parametric Intl position performs unexpectedly, Strategic Asset 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 Strategic Asset will offset losses from the drop in Strategic Asset's long position.| Parametric Intl vs. Eaton Vance Msschsts | Parametric Intl vs. Eaton Vance Municipal | Parametric Intl vs. Eaton Vance Municipal | Parametric Intl vs. Eaton Vance Municipal |
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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.
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