Correlation Between Siit Large and Federated Government
Can any of the company-specific risk be diversified away by investing in both Siit Large and Federated Government 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 Federated Government 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 Federated Government Ultrashort, you can compare the effects of market volatilities on Siit Large and Federated Government 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 Federated Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siit Large and Federated Government.
Diversification Opportunities for Siit Large and Federated Government
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SIIT and Federated is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Siit Large Cap and Federated Government Ultrashor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Government 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 Federated Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Government has no effect on the direction of Siit Large i.e., Siit Large and Federated Government go up and down completely randomly.
Pair Corralation between Siit Large and Federated Government
Assuming the 90 days horizon Siit Large Cap is expected to generate 17.9 times more return on investment than Federated Government. However, Siit Large is 17.9 times more volatile than Federated Government Ultrashort. It trades about 0.4 of its potential returns per unit of risk. Federated Government Ultrashort is currently generating about 0.13 per unit of risk. If you would invest 1,234 in Siit Large Cap on September 3, 2024 and sell it today you would earn a total of 72.00 from holding Siit Large Cap or generate 5.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Siit Large Cap vs. Federated Government Ultrashor
Performance |
| Timeline |
| Siit Large Cap |
| Federated Government |
Siit Large and Federated Government Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Siit Large and Federated Government
The main advantage of trading using opposite Siit Large and Federated Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siit Large position performs unexpectedly, Federated Government 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 Federated Government will offset losses from the drop in Federated Government's long position.| Siit Large vs. Nuveen High Income | Siit Large vs. Ab Global Risk | Siit Large vs. Ab Global Risk | Siit Large vs. Metropolitan West High |
| Federated Government vs. Dunham Large Cap | Federated Government vs. Siit Large Cap | Federated Government vs. Qs Large Cap | Federated Government vs. Qs Large 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |