Correlation Between Saba Closed and Alerian Energy

Can any of the company-specific risk be diversified away by investing in both Saba Closed and Alerian Energy 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 Alerian Energy 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 Alerian Energy Infrastructure, you can compare the effects of market volatilities on Saba Closed and Alerian Energy 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 Alerian Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saba Closed and Alerian Energy.

Diversification Opportunities for Saba Closed and Alerian Energy

0.67

Correlation Coefficient

Saba Closed  Alerian Energy

Poor diversification

The 3 months correlation between Saba and Alerian is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Saba Closed End Funds and Alerian Energy Infrastructure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alerian Energy Infra 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 Alerian Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alerian Energy Infra has no effect on the direction of Saba Closed i.e., Saba Closed and Alerian Energy go up and down completely randomly.

Pair Corralation between Saba Closed and Alerian Energy

Given the investment horizon of 90 days Saba Closed End Funds is expected to generate 0.57 times more return on investment than Alerian Energy. However, Saba Closed End Funds is 1.75 times less risky than Alerian Energy. It trades about 0.23 of its potential returns per unit of risk. Alerian Energy Infrastructure is currently generating about 0.12 per unit of risk. If you would invest  2,080  in Saba Closed End Funds on May 6, 2025 and sell it today you would earn a total of  153.00  from holding Saba Closed End Funds or generate 7.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Saba Closed End Funds  vs.  Alerian Energy Infrastructure

Saba Closed End

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Saba Closed End Funds are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile technical and fundamental indicators, Saba Closed may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Alerian Energy Infra

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Alerian Energy Infrastructure are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak technical and fundamental indicators, Alerian Energy may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Saba Closed and Alerian Energy

The main advantage of trading using opposite Saba Closed and Alerian Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saba Closed position performs unexpectedly, Alerian Energy 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 Alerian Energy will offset losses from the drop in Alerian Energy's long position.

The idea behind Saba Closed End Funds and Alerian Energy Infrastructure pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.