Correlation Between Strategic Advisers and Balanced Strategy

Can any of the company-specific risk be diversified away by investing in both Strategic Advisers and Balanced Strategy 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 Strategic Advisers and Balanced Strategy into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Strategic Advisers Emerging and Balanced Strategy Fund, you can compare the effects of market volatilities on Strategic Advisers and Balanced Strategy 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 Strategic Advisers with a short position of Balanced Strategy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Strategic Advisers and Balanced Strategy.

Diversification Opportunities for Strategic Advisers and Balanced Strategy

0.96

Correlation Coefficient

Strategic Advisers  Balanced Strategy

Almost no diversification

The 3 months correlation between STRATEGIC and Balanced is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Strategic Advisers Emerging and Balanced Strategy Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Balanced Strategy and Strategic Advisers 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 Strategic Advisers Emerging are associated (or correlated) with Balanced Strategy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Balanced Strategy has no effect on the direction of Strategic Advisers i.e., Strategic Advisers and Balanced Strategy go up and down completely randomly.

Pair Corralation between Strategic Advisers and Balanced Strategy

Assuming the 90 days horizon Strategic Advisers Emerging is expected to generate 1.52 times more return on investment than Balanced Strategy. However, Strategic Advisers is 1.52 times more volatile than Balanced Strategy Fund. It trades about 0.2 of its potential returns per unit of risk. Balanced Strategy Fund is currently generating about 0.2 per unit of risk. If you would invest  1,206  in Strategic Advisers Emerging on May 14, 2025 and sell it today you would earn a total of  98.00  from holding Strategic Advisers Emerging or generate 8.13% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.39%
Values	Daily Returns

Strategic Advisers Emerging  vs.  Balanced Strategy Fund

Strategic Advisers

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Strategic Advisers Emerging are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak primary indicators, Strategic Advisers may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Balanced Strategy

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Balanced Strategy Fund are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Balanced Strategy is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Strategic Advisers and Balanced Strategy

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

The idea behind Strategic Advisers Emerging and Balanced Strategy Fund 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.