Correlation Between Extended Market and Strategic Asset
Can any of the company-specific risk be diversified away by investing in both Extended Market 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 Extended Market and Strategic Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Extended Market Index and Strategic Asset Management, you can compare the effects of market volatilities on Extended Market 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 Extended Market with a short position of Strategic Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Extended Market and Strategic Asset.
Diversification Opportunities for Extended Market and Strategic Asset
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Extended and Strategic is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Extended Market Index 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 Extended 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 Extended Market Index 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 Extended Market i.e., Extended Market and Strategic Asset go up and down completely randomly.
Pair Corralation between Extended Market and Strategic Asset
Assuming the 90 days horizon Extended Market Index is expected to generate 2.29 times more return on investment than Strategic Asset. However, Extended Market is 2.29 times more volatile than Strategic Asset Management. It trades about 0.29 of its potential returns per unit of risk. Strategic Asset Management is currently generating about 0.24 per unit of risk. If you would invest 2,065 in Extended Market Index on June 7, 2025 and sell it today you would earn a total of 144.00 from holding Extended Market Index or generate 6.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Extended Market Index vs. Strategic Asset Management
Performance |
| Timeline |
| Extended Market Index |
| Strategic Asset Mana |
Extended Market and Strategic Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Extended Market and Strategic Asset
The main advantage of trading using opposite Extended Market and Strategic Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Extended Market 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.| Extended Market vs. Aig Government Money | Extended Market vs. Dunham Porategovernment Bond | Extended Market vs. Davis Government Bond | Extended Market vs. Ridgeworth Seix Government |
| Strategic Asset vs. Lord Abbett Diversified | Strategic Asset vs. Massmutual Premier Diversified | Strategic Asset vs. Victory Diversified Stock | Strategic Asset vs. Jpmorgan Diversified Fund |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance |