Correlation Between Siit High and New Economy
Can any of the company-specific risk be diversified away by investing in both Siit High and New Economy 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 High and New Economy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Siit High Yield and New Economy Fund, you can compare the effects of market volatilities on Siit High and New Economy 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 High with a short position of New Economy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siit High and New Economy.
Diversification Opportunities for Siit High and New Economy
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Siit and New is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Siit High Yield and New Economy Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Economy Fund and Siit High 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 High Yield are associated (or correlated) with New Economy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Economy Fund has no effect on the direction of Siit High i.e., Siit High and New Economy go up and down completely randomly.
Pair Corralation between Siit High and New Economy
Assuming the 90 days horizon Siit High is expected to generate 5.65 times less return on investment than New Economy. But when comparing it to its historical volatility, Siit High Yield is 5.88 times less risky than New Economy. It trades about 0.16 of its potential returns per unit of risk. New Economy Fund is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 6,129 in New Economy Fund on November 4, 2024 and sell it today you would earn a total of 201.00 from holding New Economy Fund or generate 3.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Siit High Yield vs. New Economy Fund
Performance |
| Timeline |
| Siit High Yield |
| New Economy Fund |
Siit High and New Economy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Siit High and New Economy
The main advantage of trading using opposite Siit High and New Economy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siit High position performs unexpectedly, New Economy 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 New Economy will offset losses from the drop in New Economy's long position.| Siit High vs. Rbc Small Cap | Siit High vs. Df Dent Small | Siit High vs. Franklin Small Cap | Siit High vs. Needham Small Cap |
| New Economy vs. Barings High Yield | New Economy vs. Artisan High Income | New Economy vs. Chartwell Short Duration | New Economy vs. Massmutual Premier High |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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