Correlation Between Sit International and Stet Intermediate
Can any of the company-specific risk be diversified away by investing in both Sit International and Stet Intermediate 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 Sit International and Stet Intermediate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sit International Equity and Stet Intermediate Term, you can compare the effects of market volatilities on Sit International and Stet Intermediate 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 Sit International with a short position of Stet Intermediate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sit International and Stet Intermediate.
Diversification Opportunities for Sit International and Stet Intermediate
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sit and Stet is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Sit International Equity and Stet Intermediate Term in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stet Intermediate Term and Sit International 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 Sit International Equity are associated (or correlated) with Stet Intermediate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stet Intermediate Term has no effect on the direction of Sit International i.e., Sit International and Stet Intermediate go up and down completely randomly.
Pair Corralation between Sit International and Stet Intermediate
Assuming the 90 days horizon Sit International Equity is expected to under-perform the Stet Intermediate. In addition to that, Sit International is 2.69 times more volatile than Stet Intermediate Term. It trades about -0.24 of its total potential returns per unit of risk. Stet Intermediate Term is currently generating about 0.16 per unit of volatility. If you would invest 1,106 in Stet Intermediate Term on August 29, 2024 and sell it today you would earn a total of 10.00 from holding Stet Intermediate Term or generate 0.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sit International Equity vs. Stet Intermediate Term
Performance |
| Timeline |
| Sit International Equity |
| Stet Intermediate Term |
Sit International and Stet Intermediate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sit International and Stet Intermediate
The main advantage of trading using opposite Sit International and Stet Intermediate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sit International position performs unexpectedly, Stet Intermediate 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 Stet Intermediate will offset losses from the drop in Stet Intermediate's long position.| Sit International vs. Sit Emerging Markets | Sit International vs. Simt E Fixed | Sit International vs. Simt Multi Asset Income | Sit International vs. Simt Global Managed |
| Stet Intermediate vs. Lord Abbett High | Stet Intermediate vs. Gmo High Yield | Stet Intermediate vs. Pace High Yield | Stet Intermediate vs. Blackrock High Yield |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |