Correlation Between Siit Large and Amer Beacon
Can any of the company-specific risk be diversified away by investing in both Siit Large and Amer Beacon 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 Large and Amer Beacon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Siit Large Cap and Amer Beacon Ark, you can compare the effects of market volatilities on Siit Large and Amer Beacon 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 Large with a short position of Amer Beacon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siit Large and Amer Beacon.
Diversification Opportunities for Siit Large and Amer Beacon
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between SIIT and Amer is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Siit Large Cap and Amer Beacon Ark in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amer Beacon Ark and Siit Large 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 Large Cap are associated (or correlated) with Amer Beacon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amer Beacon Ark has no effect on the direction of Siit Large i.e., Siit Large and Amer Beacon go up and down completely randomly.
Pair Corralation between Siit Large and Amer Beacon
Assuming the 90 days horizon Siit Large Cap is expected to generate 0.33 times more return on investment than Amer Beacon. However, Siit Large Cap is 3.0 times less risky than Amer Beacon. It trades about 0.15 of its potential returns per unit of risk. Amer Beacon Ark is currently generating about 0.05 per unit of risk. If you would invest 997.00 in Siit Large Cap on September 4, 2024 and sell it today you would earn a total of 309.00 from holding Siit Large Cap or generate 30.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.6% |
| Values | Daily Returns |
Siit Large Cap vs. Amer Beacon Ark
Performance |
| Timeline |
| Siit Large Cap |
| Amer Beacon Ark |
Siit Large and Amer Beacon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Siit Large and Amer Beacon
The main advantage of trading using opposite Siit Large and Amer Beacon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siit Large position performs unexpectedly, Amer Beacon 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 Amer Beacon will offset losses from the drop in Amer Beacon's long position.| Siit Large vs. Rbb Fund | Siit Large vs. T Rowe Price | Siit Large vs. T Rowe Price | Siit Large vs. Scharf Global Opportunity |
| Amer Beacon vs. Fuller Thaler Behavioral | Amer Beacon vs. Principal Lifetime Hybrid | Amer Beacon vs. Northern Small Cap | Amer Beacon vs. Tax Managed Mid Small |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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