Correlation Between Stet California and Siit Us
Can any of the company-specific risk be diversified away by investing in both Stet California and Siit Us 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 Stet California and Siit Us into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stet California Municipal and Siit Equity Factor, you can compare the effects of market volatilities on Stet California and Siit Us 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 Stet California with a short position of Siit Us. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stet California and Siit Us.
Diversification Opportunities for Stet California and Siit Us
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between STET and Siit is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Stet California Municipal and Siit Equity Factor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siit Equity Factor and Stet California 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 Stet California Municipal are associated (or correlated) with Siit Us. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siit Equity Factor has no effect on the direction of Stet California i.e., Stet California and Siit Us go up and down completely randomly.
Pair Corralation between Stet California and Siit Us
Assuming the 90 days horizon Stet California is expected to generate 6.61 times less return on investment than Siit Us. But when comparing it to its historical volatility, Stet California Municipal is 3.43 times less risky than Siit Us. It trades about 0.21 of its potential returns per unit of risk. Siit Equity Factor is currently generating about 0.41 of returns per unit of risk over similar time horizon. If you would invest 1,508 in Siit Equity Factor on September 4, 2024 and sell it today you would earn a total of 105.00 from holding Siit Equity Factor or generate 6.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Stet California Municipal vs. Siit Equity Factor
Performance |
| Timeline |
| Stet California Municipal |
| Siit Equity Factor |
Stet California and Siit Us Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stet California and Siit Us
The main advantage of trading using opposite Stet California and Siit Us positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stet California position performs unexpectedly, Siit Us 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 Us will offset losses from the drop in Siit Us' long position.| Stet California vs. Simt Multi Asset Accumulation | Stet California vs. Saat Market Growth | Stet California vs. Simt Real Return | Stet California vs. Simt Small Cap |
| Siit Us vs. Jhancock Short Duration | Siit Us vs. Maryland Short Term Tax Free | Siit Us vs. Siit Ultra Short | Siit Us vs. Locorr Longshort Modities |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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