Correlation Between Siit E and Siit World
Can any of the company-specific risk be diversified away by investing in both Siit E and Siit World 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 Siit E and Siit World into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Siit E Fixed and Siit World Select, you can compare the effects of market volatilities on Siit E and Siit World 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 Siit E with a short position of Siit World. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siit E and Siit World.
Diversification Opportunities for Siit E and Siit World
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Siit and Siit is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Siit E Fixed and Siit World Select in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siit World Select and Siit E 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 Siit E Fixed are associated (or correlated) with Siit World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siit World Select has no effect on the direction of Siit E i.e., Siit E and Siit World go up and down completely randomly.
Pair Corralation between Siit E and Siit World
Assuming the 90 days horizon Siit E is expected to generate 4.65 times less return on investment than Siit World. But when comparing it to its historical volatility, Siit E Fixed is 1.66 times less risky than Siit World. It trades about 0.03 of its potential returns per unit of risk. Siit World Select is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,135 in Siit World Select on September 14, 2024 and sell it today you would earn a total of 181.00 from holding Siit World Select or generate 15.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Siit E Fixed vs. Siit World Select
Performance |
| Timeline |
| Siit E Fixed |
| Siit World Select |
Siit E and Siit World Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Siit E and Siit World
The main advantage of trading using opposite Siit E and Siit World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siit E position performs unexpectedly, Siit World 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 World will offset losses from the drop in Siit World's long position.| Siit E vs. Pace Municipal Fixed | Siit E vs. Blrc Sgy Mnp | Siit E vs. Alliancebernstein National Municipal | Siit E vs. Ishares Municipal Bond |
| Siit World vs. Simt Multi Asset Accumulation | Siit World vs. Saat Market Growth | Siit World vs. Simt Real Return | Siit World 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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