Correlation Between Sdit Short and Sit International
Can any of the company-specific risk be diversified away by investing in both Sdit Short and Sit International 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 Sdit Short and Sit International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sdit Short Duration and Sit International Equity, you can compare the effects of market volatilities on Sdit Short and Sit International 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 Sdit Short with a short position of Sit International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sdit Short and Sit International.
Diversification Opportunities for Sdit Short and Sit International
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sdit and Sit is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Sdit Short Duration and Sit International Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sit International Equity and Sdit Short 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 Sdit Short Duration are associated (or correlated) with Sit International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sit International Equity has no effect on the direction of Sdit Short i.e., Sdit Short and Sit International go up and down completely randomly.
Pair Corralation between Sdit Short and Sit International
Assuming the 90 days horizon Sdit Short is expected to generate 27.85 times less return on investment than Sit International. But when comparing it to its historical volatility, Sdit Short Duration is 9.88 times less risky than Sit International. It trades about 0.12 of its potential returns per unit of risk. Sit International Equity is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 1,115 in Sit International Equity on November 8, 2024 and sell it today you would earn a total of 63.00 from holding Sit International Equity or generate 5.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sdit Short Duration vs. Sit International Equity
Performance |
| Timeline |
| Sdit Short Duration |
| Sit International Equity |
Sdit Short and Sit International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sdit Short and Sit International
The main advantage of trading using opposite Sdit Short and Sit International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sdit Short position performs unexpectedly, Sit International 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 Sit International will offset losses from the drop in Sit International's long position.| Sdit Short vs. Columbia Convertible Securities | Sdit Short vs. Lord Abbett Convertible | Sdit Short vs. Absolute Convertible Arbitrage | Sdit Short vs. Advent Claymore Convertible |
| Sit International vs. Oakhurst Short Duration | Sit International vs. Old Westbury Short Term | Sit International vs. Transam Short Term Bond | Sit International vs. Nuveen Short Term |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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