Correlation Between Sit Mid and Live Oak
Can any of the company-specific risk be diversified away by investing in both Sit Mid and Live Oak 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 Mid and Live Oak into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sit Mid Cap and Live Oak Health, you can compare the effects of market volatilities on Sit Mid and Live Oak 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 Mid with a short position of Live Oak. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sit Mid and Live Oak.
Diversification Opportunities for Sit Mid and Live Oak
Very good diversification
The 3 months correlation between Sit and Live is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Sit Mid Cap and Live Oak Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Live Oak Health and Sit Mid 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 Mid Cap are associated (or correlated) with Live Oak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Live Oak Health has no effect on the direction of Sit Mid i.e., Sit Mid and Live Oak go up and down completely randomly.
Pair Corralation between Sit Mid and Live Oak
Assuming the 90 days horizon Sit Mid Cap is expected to generate 1.38 times more return on investment than Live Oak. However, Sit Mid is 1.38 times more volatile than Live Oak Health. It trades about 0.06 of its potential returns per unit of risk. Live Oak Health is currently generating about 0.01 per unit of risk. If you would invest 1,908 in Sit Mid Cap on September 3, 2024 and sell it today you would earn a total of 653.00 from holding Sit Mid Cap or generate 34.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sit Mid Cap vs. Live Oak Health
Performance |
| Timeline |
| Sit Mid Cap |
| Live Oak Health |
Sit Mid and Live Oak Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sit Mid and Live Oak
The main advantage of trading using opposite Sit Mid and Live Oak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sit Mid position performs unexpectedly, Live Oak 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 Live Oak will offset losses from the drop in Live Oak's long position.| Sit Mid vs. Aig Government Money | Sit Mid vs. First American Funds | Sit Mid vs. Lord Abbett Emerging | Sit Mid vs. Wells Fargo Funds |
| Live Oak vs. Vanguard Health Care | Live Oak vs. Vanguard Health Care | Live Oak vs. T Rowe Price | Live Oak vs. T Rowe Price |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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