Correlation Between Siit Large and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Siit Large and Dow Jones 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 Siit Large and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Siit Large Cap and Dow Jones Industrial, you can compare the effects of market volatilities on Siit Large and Dow Jones 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 Siit Large with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siit Large and Dow Jones.
Diversification Opportunities for Siit Large and Dow Jones
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Siit and Dow is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Siit Large Cap and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and Siit Large 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 Siit Large Cap are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Siit Large i.e., Siit Large and Dow Jones go up and down completely randomly.
Pair Corralation between Siit Large and Dow Jones
Assuming the 90 days horizon Siit Large is expected to generate 1.26 times less return on investment than Dow Jones. But when comparing it to its historical volatility, Siit Large Cap is 1.13 times less risky than Dow Jones. It trades about 0.19 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 4,237,436 in Dow Jones Industrial on August 25, 2024 and sell it today you would earn a total of 192,215 from holding Dow Jones Industrial or generate 4.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Siit Large Cap vs. Dow Jones Industrial
Performance |
| Timeline |
Siit Large and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Siit Large Cap
Pair trading matchups for Siit Large
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Siit Large and Dow Jones
The main advantage of trading using opposite Siit Large and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siit Large position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Siit Large vs. Siit Dynamic Asset | Siit Large vs. Columbia Large Cap | Siit Large vs. Janus Growth And | Siit Large vs. Nationwide Sp 500 |
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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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