Correlation Between Siit Large and Capital World
Can any of the company-specific risk be diversified away by investing in both Siit Large and Capital 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 Large and Capital World 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 Capital World Bond, you can compare the effects of market volatilities on Siit Large and Capital 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 Large with a short position of Capital World. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siit Large and Capital World.
Diversification Opportunities for Siit Large and Capital World
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Siit and Capital is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Siit Large Cap and Capital World Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital World Bond 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 Capital World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital World Bond has no effect on the direction of Siit Large i.e., Siit Large and Capital World go up and down completely randomly.
Pair Corralation between Siit Large and Capital World
Assuming the 90 days horizon Siit Large Cap is expected to generate 1.84 times more return on investment than Capital World. However, Siit Large is 1.84 times more volatile than Capital World Bond. It trades about 0.12 of its potential returns per unit of risk. Capital World Bond is currently generating about 0.02 per unit of risk. If you would invest 957.00 in Siit Large Cap on September 12, 2024 and sell it today you would earn a total of 344.00 from holding Siit Large Cap or generate 35.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Siit Large Cap vs. Capital World Bond
Performance |
| Timeline |
| Siit Large Cap |
| Capital World Bond |
Siit Large and Capital World Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Siit Large and Capital World
The main advantage of trading using opposite Siit Large and Capital World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siit Large position performs unexpectedly, Capital 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 Capital World will offset losses from the drop in Capital World's long position.| Siit Large vs. Siit Screened World | Siit Large vs. Siit Opportunistic Income | Siit Large vs. Siit Large Cap | Siit Large vs. Siit Limited Duration |
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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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