Correlation Between Siit High and Ing Evergreen

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Can any of the company-specific risk be diversified away by investing in both Siit High and Ing Evergreen 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 Ing Evergreen 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 Ing Evergreen Omega, you can compare the effects of market volatilities on Siit High and Ing Evergreen 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 Ing Evergreen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siit High and Ing Evergreen.

Diversification Opportunities for Siit High and Ing Evergreen

0.86
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Siit and Ing is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Siit High Yield and Ing Evergreen Omega in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ing Evergreen Omega 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 Ing Evergreen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ing Evergreen Omega has no effect on the direction of Siit High i.e., Siit High and Ing Evergreen go up and down completely randomly.

Pair Corralation between Siit High and Ing Evergreen

Assuming the 90 days horizon Siit High is expected to generate 7.39 times less return on investment than Ing Evergreen. But when comparing it to its historical volatility, Siit High Yield is 6.29 times less risky than Ing Evergreen. It trades about 0.13 of its potential returns per unit of risk. Ing Evergreen Omega is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  1,367  in Ing Evergreen Omega on September 19, 2024 and sell it today you would earn a total of  56.00  from holding Ing Evergreen Omega or generate 4.1% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

Siit High Yield  vs.  Ing Evergreen Omega

 Performance 
       Timeline  
Siit High Yield 

Risk-Adjusted Performance

7 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Siit High Yield are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Siit High is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Ing Evergreen Omega 

Risk-Adjusted Performance

10 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Ing Evergreen Omega are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Ing Evergreen may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Siit High and Ing Evergreen Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Siit High and Ing Evergreen

The main advantage of trading using opposite Siit High and Ing Evergreen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siit High position performs unexpectedly, Ing Evergreen 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 Ing Evergreen will offset losses from the drop in Ing Evergreen's long position.
The idea behind Siit High Yield and Ing Evergreen Omega pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..

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