Correlation Between Us Strategic and Wasatch Large

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

By analyzing existing cross correlation between Us Strategic Equity and Wasatch Large Cap, you can compare the effects of market volatilities on Us Strategic and Wasatch Large 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 Us Strategic with a short position of Wasatch Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Us Strategic and Wasatch Large.

Diversification Opportunities for Us Strategic and Wasatch Large

0.75

Correlation Coefficient

Us Strategic  Wasatch Large

Poor diversification

The 3 months correlation between RSEAX and Wasatch is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Us Strategic Equity and Wasatch Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wasatch Large Cap and Us Strategic 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 Us Strategic Equity are associated (or correlated) with Wasatch Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wasatch Large Cap has no effect on the direction of Us Strategic i.e., Us Strategic and Wasatch Large go up and down completely randomly.

Pair Corralation between Us Strategic and Wasatch Large

Assuming the 90 days horizon Us Strategic is expected to generate 1.27 times less return on investment than Wasatch Large. In addition to that, Us Strategic is 1.51 times more volatile than Wasatch Large Cap. It trades about 0.09 of its total potential returns per unit of risk. Wasatch Large Cap is currently generating about 0.17 per unit of volatility. If you would invest  1,069  in Wasatch Large Cap on September 8, 2025 and sell it today you would earn a total of  61.00  from holding Wasatch Large Cap or generate 5.71% return on investment over 90 days.

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

Us Strategic Equity  vs.  Wasatch Large Cap

Us Strategic Equity

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Us Strategic Equity are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Us Strategic is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Wasatch Large Cap

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Wasatch Large Cap are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Wasatch Large is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Us Strategic and Wasatch Large

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

The idea behind Us Strategic Equity and Wasatch Large Cap 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.