Correlation Between Plumb Balanced and Sit International
Can any of the company-specific risk be diversified away by investing in both Plumb Balanced and Sit International 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 Plumb Balanced and Sit International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Plumb Balanced Fund and Sit International Growth, you can compare the effects of market volatilities on Plumb Balanced and Sit International 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 Plumb Balanced with a short position of Sit International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Plumb Balanced and Sit International.
Diversification Opportunities for Plumb Balanced and Sit International
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Plumb and Sit is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Plumb Balanced Fund and Sit International Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sit International Growth and Plumb Balanced 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 Plumb Balanced Fund are associated (or correlated) with Sit International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sit International Growth has no effect on the direction of Plumb Balanced i.e., Plumb Balanced and Sit International go up and down completely randomly.
Pair Corralation between Plumb Balanced and Sit International
Assuming the 90 days horizon Plumb Balanced Fund is expected to generate 0.91 times more return on investment than Sit International. However, Plumb Balanced Fund is 1.1 times less risky than Sit International. It trades about 0.16 of its potential returns per unit of risk. Sit International Growth is currently generating about -0.08 per unit of risk. If you would invest 3,984 in Plumb Balanced Fund on August 30, 2024 and sell it today you would earn a total of 106.00 from holding Plumb Balanced Fund or generate 2.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Plumb Balanced Fund vs. Sit International Growth
Performance |
| Timeline |
| Plumb Balanced |
| Sit International Growth |
Plumb Balanced and Sit International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Plumb Balanced and Sit International
The main advantage of trading using opposite Plumb Balanced and Sit International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Plumb Balanced position performs unexpectedly, Sit International 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 Sit International will offset losses from the drop in Sit International's long position.| Plumb Balanced vs. Plumb Equity Fund | Plumb Balanced vs. Value Line Asset | Plumb Balanced vs. Sit Balanced Fund | Plumb Balanced vs. Performance Trust Strategic |
| Sit International vs. Pia High Yield | Sit International vs. Artisan High Income | Sit International vs. Lord Abbett High | Sit International vs. Msift High Yield |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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