Correlation Between Sit Esg and American Funds
Can any of the company-specific risk be diversified away by investing in both Sit Esg and American Funds 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 Sit Esg and American Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sit Esg Growth and American Funds Capital, you can compare the effects of market volatilities on Sit Esg and American Funds 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 Sit Esg with a short position of American Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sit Esg and American Funds.
Diversification Opportunities for Sit Esg and American Funds
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sit and American is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Sit Esg Growth and American Funds Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Funds Capital and Sit Esg 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 Sit Esg Growth are associated (or correlated) with American Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Funds Capital has no effect on the direction of Sit Esg i.e., Sit Esg and American Funds go up and down completely randomly.
Pair Corralation between Sit Esg and American Funds
Assuming the 90 days horizon Sit Esg Growth is expected to generate 0.98 times more return on investment than American Funds. However, Sit Esg Growth is 1.02 times less risky than American Funds. It trades about 0.33 of its potential returns per unit of risk. American Funds Capital is currently generating about 0.17 per unit of risk. If you would invest 2,198 in Sit Esg Growth on September 4, 2024 and sell it today you would earn a total of 92.00 from holding Sit Esg Growth or generate 4.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Sit Esg Growth vs. American Funds Capital
Performance |
| Timeline |
| Sit Esg Growth |
| American Funds Capital |
Sit Esg and American Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sit Esg and American Funds
The main advantage of trading using opposite Sit Esg and American Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sit Esg position performs unexpectedly, American Funds 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 American Funds will offset losses from the drop in American Funds' long position.| Sit Esg vs. Calamos Dynamic Convertible | Sit Esg vs. Rationalpier 88 Convertible | Sit Esg vs. Fidelity Sai Convertible | Sit Esg vs. Lord Abbett Convertible |
| American Funds vs. Calamos Market Neutral | American Funds vs. Legg Mason Partners | American Funds vs. Transamerica Emerging Markets | American Funds vs. Massmutual Select Diversified |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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