Correlation Between Balanced Fund and Strategic Asset
Can any of the company-specific risk be diversified away by investing in both Balanced Fund 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 Balanced Fund and Strategic Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Balanced Fund Retail and Strategic Asset Management, you can compare the effects of market volatilities on Balanced Fund 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 Balanced Fund with a short position of Strategic Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Balanced Fund and Strategic Asset.
Diversification Opportunities for Balanced Fund and Strategic Asset
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Balanced and Strategic is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Balanced Fund Retail 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 Balanced Fund 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 Balanced Fund Retail 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 Balanced Fund i.e., Balanced Fund and Strategic Asset go up and down completely randomly.
Pair Corralation between Balanced Fund and Strategic Asset
Assuming the 90 days horizon Balanced Fund is expected to generate 1.05 times less return on investment than Strategic Asset. But when comparing it to its historical volatility, Balanced Fund Retail is 1.4 times less risky than Strategic Asset. It trades about 0.24 of its potential returns per unit of risk. Strategic Asset Management is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 2,316 in Strategic Asset Management on June 5, 2025 and sell it today you would earn a total of 146.00 from holding Strategic Asset Management or generate 6.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Balanced Fund Retail vs. Strategic Asset Management
Performance |
| Timeline |
| Balanced Fund Retail |
| Strategic Asset Mana |
Balanced Fund and Strategic Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Balanced Fund and Strategic Asset
The main advantage of trading using opposite Balanced Fund and Strategic Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Balanced Fund 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.| Balanced Fund vs. Infrastructure Fund Retail | Balanced Fund vs. Thrivent High Yield | Balanced Fund vs. Morningstar Unconstrained Allocation | Balanced Fund vs. Via Renewables |
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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