Correlation Between Saba Closed and IShares Core
Can any of the company-specific risk be diversified away by investing in both Saba Closed and IShares Core 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 Saba Closed and IShares Core into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Saba Closed End Funds and iShares Core Growth, you can compare the effects of market volatilities on Saba Closed and IShares Core 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 Saba Closed with a short position of IShares Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saba Closed and IShares Core.
Diversification Opportunities for Saba Closed and IShares Core
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Saba and IShares is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Saba Closed End Funds and iShares Core Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Core Growth and Saba Closed 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 Saba Closed End Funds are associated (or correlated) with IShares Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Core Growth has no effect on the direction of Saba Closed i.e., Saba Closed and IShares Core go up and down completely randomly.
Pair Corralation between Saba Closed and IShares Core
Given the investment horizon of 90 days Saba Closed End Funds is expected to under-perform the IShares Core. In addition to that, Saba Closed is 1.69 times more volatile than iShares Core Growth. It trades about -0.15 of its total potential returns per unit of risk. iShares Core Growth is currently generating about -0.19 per unit of volatility. If you would invest 5,512 in iShares Core Growth on January 26, 2024 and sell it today you would lose (115.00) from holding iShares Core Growth or give up 2.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Saba Closed End Funds vs. iShares Core Growth
Performance |
| Timeline |
| Saba Closed End |
| iShares Core Growth |
Saba Closed and IShares Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Saba Closed and IShares Core
The main advantage of trading using opposite Saba Closed and IShares Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saba Closed position performs unexpectedly, IShares Core 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 IShares Core will offset losses from the drop in IShares Core's long position.| Saba Closed vs. First Trust Income | Saba Closed vs. Invesco CEF Income | Saba Closed vs. GraniteShares HIPS High | Saba Closed vs. Amplify High Income |
| IShares Core vs. Mohr Growth ETF | IShares Core vs. Aquagold International | IShares Core vs. Morningstar Unconstrained Allocation | IShares Core vs. High Yield Municipal 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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