Correlation Between Lifex Income and Siit Emerging
Can any of the company-specific risk be diversified away by investing in both Lifex Income and Siit Emerging 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 Lifex Income and Siit Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lifex Income and Siit Emerging Markets, you can compare the effects of market volatilities on Lifex Income and Siit Emerging 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 Lifex Income with a short position of Siit Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lifex Income and Siit Emerging.
Diversification Opportunities for Lifex Income and Siit Emerging
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lifex and Siit is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Lifex Income and Siit Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siit Emerging Markets and Lifex Income 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 Lifex Income are associated (or correlated) with Siit Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siit Emerging Markets has no effect on the direction of Lifex Income i.e., Lifex Income and Siit Emerging go up and down completely randomly.
Pair Corralation between Lifex Income and Siit Emerging
Assuming the 90 days horizon Lifex Income is expected to generate 1.38 times more return on investment than Siit Emerging. However, Lifex Income is 1.38 times more volatile than Siit Emerging Markets. It trades about 0.11 of its potential returns per unit of risk. Siit Emerging Markets is currently generating about 0.13 per unit of risk. If you would invest 1,876 in Lifex Income on September 13, 2024 and sell it today you would earn a total of 31.00 from holding Lifex Income or generate 1.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Lifex Income vs. Siit Emerging Markets
Performance |
| Timeline |
| Lifex Income |
| Siit Emerging Markets |
Lifex Income and Siit Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lifex Income and Siit Emerging
The main advantage of trading using opposite Lifex Income and Siit Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lifex Income position performs unexpectedly, Siit Emerging 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 Emerging will offset losses from the drop in Siit Emerging's long position.| Lifex Income vs. Stone Ridge High | Lifex Income vs. Stone Ridge High | Lifex Income vs. Davidson Multi Cap Equity | Lifex Income vs. Fidelity Growth Income |
| Siit Emerging vs. Simt Multi Asset Accumulation | Siit Emerging vs. Saat Market Growth | Siit Emerging vs. Simt Real Return | Siit Emerging vs. Simt Small Cap |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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