Correlation Between First American and Siit Ultra
Can any of the company-specific risk be diversified away by investing in both First American and Siit Ultra 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 First American and Siit Ultra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First American Funds and Siit Ultra Short, you can compare the effects of market volatilities on First American and Siit Ultra 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 First American with a short position of Siit Ultra. Check out your portfolio center. Please also check ongoing floating volatility patterns of First American and Siit Ultra.
Diversification Opportunities for First American and Siit Ultra
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between First and Siit is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding First American Funds and Siit Ultra Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siit Ultra Short and First American 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 First American Funds are associated (or correlated) with Siit Ultra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siit Ultra Short has no effect on the direction of First American i.e., First American and Siit Ultra go up and down completely randomly.
Pair Corralation between First American and Siit Ultra
Assuming the 90 days horizon First American Funds is expected to generate 205.09 times more return on investment than Siit Ultra. However, First American is 205.09 times more volatile than Siit Ultra Short. It trades about 0.04 of its potential returns per unit of risk. Siit Ultra Short is currently generating about 0.22 per unit of risk. If you would invest 94.00 in First American Funds on September 12, 2024 and sell it today you would earn a total of 6.00 from holding First American Funds or generate 6.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First American Funds vs. Siit Ultra Short
Performance |
| Timeline |
| First American Funds |
| Siit Ultra Short |
First American and Siit Ultra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First American and Siit Ultra
The main advantage of trading using opposite First American and Siit Ultra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First American position performs unexpectedly, Siit Ultra 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 Siit Ultra will offset losses from the drop in Siit Ultra's long position.| First American vs. Siit Ultra Short | First American vs. Quantitative Longshort Equity | First American vs. Rbc Short Duration | First American vs. Franklin Federal Limited Term |
| Siit Ultra vs. SCOR PK | Siit Ultra vs. Morningstar Unconstrained Allocation | Siit Ultra vs. Via Renewables | Siit Ultra vs. Bondbloxx ETF Trust |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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