Correlation Between Siit Large and Siit Sp
Can any of the company-specific risk be diversified away by investing in both Siit Large and Siit Sp 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 Siit Sp 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 Siit Sp 500, you can compare the effects of market volatilities on Siit Large and Siit Sp 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 Siit Sp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siit Large and Siit Sp.
Diversification Opportunities for Siit Large and Siit Sp
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Siit and Siit is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Siit Large Cap and Siit Sp 500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siit Sp 500 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 Siit Sp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siit Sp 500 has no effect on the direction of Siit Large i.e., Siit Large and Siit Sp go up and down completely randomly.
Pair Corralation between Siit Large and Siit Sp
Assuming the 90 days horizon Siit Large Cap is expected to generate 0.99 times more return on investment than Siit Sp. However, Siit Large Cap is 1.01 times less risky than Siit Sp. It trades about 0.09 of its potential returns per unit of risk. Siit Sp 500 is currently generating about 0.07 per unit of risk. If you would invest 19,944 in Siit Large Cap on November 5, 2024 and sell it today you would earn a total of 287.00 from holding Siit Large Cap or generate 1.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Siit Large Cap vs. Siit Sp 500
Performance |
| Timeline |
| Siit Large Cap |
| Siit Sp 500 |
Siit Large and Siit Sp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Siit Large and Siit Sp
The main advantage of trading using opposite Siit Large and Siit Sp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siit Large position performs unexpectedly, Siit Sp 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 Sp will offset losses from the drop in Siit Sp's 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 |
| Siit Sp vs. Columbia Large Cap | Siit Sp vs. T Rowe Price | Siit Sp vs. Northern Stock Index | Siit Sp vs. Siit Dynamic Asset |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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