Correlation Between Capital World and Siit High
Can any of the company-specific risk be diversified away by investing in both Capital World and Siit High 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 Capital World and Siit High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capital World Growth and Siit High Yield, you can compare the effects of market volatilities on Capital World and Siit High 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 Capital World with a short position of Siit High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capital World and Siit High.
Diversification Opportunities for Capital World and Siit High
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Capital and Siit is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Capital World Growth and Siit High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siit High Yield and Capital World 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 Capital World Growth are associated (or correlated) with Siit High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siit High Yield has no effect on the direction of Capital World i.e., Capital World and Siit High go up and down completely randomly.
Pair Corralation between Capital World and Siit High
Assuming the 90 days horizon Capital World Growth is expected to generate 2.19 times more return on investment than Siit High. However, Capital World is 2.19 times more volatile than Siit High Yield. It trades about 0.09 of its potential returns per unit of risk. Siit High Yield is currently generating about 0.1 per unit of risk. If you would invest 5,150 in Capital World Growth on September 3, 2024 and sell it today you would earn a total of 1,749 from holding Capital World Growth or generate 33.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capital World Growth vs. Siit High Yield
Performance |
| Timeline |
| Capital World Growth |
| Siit High Yield |
Capital World and Siit High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capital World and Siit High
The main advantage of trading using opposite Capital World and Siit High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capital World position performs unexpectedly, Siit High 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 High will offset losses from the drop in Siit High's long position.| Capital World vs. Vanguard Windsor Fund | Capital World vs. American Mutual Fund | Capital World vs. Tax Managed Large Cap | Capital World vs. Transamerica Large Cap |
| Siit High vs. Lord Abbett Emerging | Siit High vs. Dws Government Money | Siit High vs. Matson Money Equity | Siit High vs. Ashmore Emerging Markets |
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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