Correlation Between Transamerica Asset and Siit High
Can any of the company-specific risk be diversified away by investing in both Transamerica Asset and Siit High 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 Transamerica Asset and Siit High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Transamerica Asset Allocation and Siit High Yield, you can compare the effects of market volatilities on Transamerica Asset and Siit High 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 Transamerica Asset with a short position of Siit High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Transamerica Asset and Siit High.
Diversification Opportunities for Transamerica Asset and Siit High
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Transamerica and Siit is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Transamerica Asset Allocation and Siit High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siit High Yield and Transamerica Asset 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 Transamerica Asset Allocation are associated (or correlated) with Siit High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siit High Yield has no effect on the direction of Transamerica Asset i.e., Transamerica Asset and Siit High go up and down completely randomly.
Pair Corralation between Transamerica Asset and Siit High
Assuming the 90 days horizon Transamerica Asset Allocation is expected to generate 1.62 times more return on investment than Siit High. However, Transamerica Asset is 1.62 times more volatile than Siit High Yield. It trades about 0.21 of its potential returns per unit of risk. Siit High Yield is currently generating about 0.32 per unit of risk. If you would invest 1,075 in Transamerica Asset Allocation on September 13, 2024 and sell it today you would earn a total of 14.00 from holding Transamerica Asset Allocation or generate 1.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Transamerica Asset Allocation vs. Siit High Yield
Performance |
| Timeline |
| Transamerica Asset |
| Siit High Yield |
Transamerica Asset and Siit High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Transamerica Asset and Siit High
The main advantage of trading using opposite Transamerica Asset and Siit High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Transamerica Asset position performs unexpectedly, Siit High 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 High will offset losses from the drop in Siit High's long position.| Transamerica Asset vs. Calvert High Yield | Transamerica Asset vs. Metropolitan West High | Transamerica Asset vs. Pace High Yield | Transamerica Asset vs. Ab Global Risk |
| Siit High vs. Calvert High Yield | Siit High vs. Metropolitan West High | Siit High vs. Artisan High Income | Siit High vs. Pace High Yield |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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