Correlation Between Moderate Balanced and Strategic Asset
Can any of the company-specific risk be diversified away by investing in both Moderate Balanced 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 Moderate Balanced and Strategic Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Moderate Balanced Allocation and Strategic Asset Management, you can compare the effects of market volatilities on Moderate Balanced 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 Moderate Balanced with a short position of Strategic Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Moderate Balanced and Strategic Asset.
Diversification Opportunities for Moderate Balanced and Strategic Asset
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Moderate and Strategic is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Moderate Balanced Allocation 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 Moderate Balanced 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 Moderate Balanced Allocation 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 Moderate Balanced i.e., Moderate Balanced and Strategic Asset go up and down completely randomly.
Pair Corralation between Moderate Balanced and Strategic Asset
Assuming the 90 days horizon Moderate Balanced Allocation is expected to generate 1.46 times more return on investment than Strategic Asset. However, Moderate Balanced is 1.46 times more volatile than Strategic Asset Management. It trades about 0.23 of its potential returns per unit of risk. Strategic Asset Management is currently generating about 0.25 per unit of risk. If you would invest 1,195 in Moderate Balanced Allocation on June 2, 2025 and sell it today you would earn a total of 76.00 from holding Moderate Balanced Allocation or generate 6.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Moderate Balanced Allocation vs. Strategic Asset Management
Performance |
| Timeline |
| Moderate Balanced |
| Strategic Asset Mana |
Moderate Balanced and Strategic Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Moderate Balanced and Strategic Asset
The main advantage of trading using opposite Moderate Balanced and Strategic Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Moderate Balanced 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.| Moderate Balanced vs. Salient Alternative Beta | Moderate Balanced vs. Aggressive Balanced Allocation | Moderate Balanced vs. Salient Alternative Beta | Moderate Balanced vs. Moderately Aggressive Balanced |
| Strategic Asset vs. Tax Managed Large Cap | Strategic Asset vs. Balanced Fund Retail | Strategic Asset vs. Ab Value Fund | Strategic Asset vs. Fa 529 Aggressive |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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