Correlation Between American Funds and Sit Us
Can any of the company-specific risk be diversified away by investing in both American Funds and Sit Us 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 American Funds and Sit Us into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Funds 2010 and Sit Government Securities, you can compare the effects of market volatilities on American Funds and Sit Us 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 American Funds with a short position of Sit Us. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Funds and Sit Us.
Diversification Opportunities for American Funds and Sit Us
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between American and Sit is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding American Funds 2010 and Sit Government Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sit Government Securities and American Funds 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 American Funds 2010 are associated (or correlated) with Sit Us. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sit Government Securities has no effect on the direction of American Funds i.e., American Funds and Sit Us go up and down completely randomly.
Pair Corralation between American Funds and Sit Us
Assuming the 90 days horizon American Funds 2010 is expected to generate 1.51 times more return on investment than Sit Us. However, American Funds is 1.51 times more volatile than Sit Government Securities. It trades about 0.07 of its potential returns per unit of risk. Sit Government Securities is currently generating about 0.08 per unit of risk. If you would invest 1,126 in American Funds 2010 on December 2, 2024 and sell it today you would earn a total of 64.00 from holding American Funds 2010 or generate 5.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Funds 2010 vs. Sit Government Securities
Performance |
| Timeline |
| American Funds 2010 |
| Sit Government Securities |
American Funds and Sit Us Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Funds and Sit Us
The main advantage of trading using opposite American Funds and Sit Us positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Funds position performs unexpectedly, Sit Us 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 Us will offset losses from the drop in Sit Us' long position.| American Funds vs. Franklin Natural Resources | American Funds vs. Pimco Energy Tactical | American Funds vs. Transamerica Mlp Energy | American Funds vs. World Energy Fund |
| Sit Us vs. Profunds Large Cap Growth | Sit Us vs. Tfa Alphagen Growth | Sit Us vs. Templeton Growth Fund | Sit Us vs. Multimanager Lifestyle Growth |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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