Correlation Between Siit High and Metropolitan West
Can any of the company-specific risk be diversified away by investing in both Siit High and Metropolitan West 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 Metropolitan West 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 Metropolitan West Total, you can compare the effects of market volatilities on Siit High and Metropolitan West 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 Metropolitan West. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siit High and Metropolitan West.
Diversification Opportunities for Siit High and Metropolitan West
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Siit and Metropolitan is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Siit High Yield and Metropolitan West Total in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metropolitan West Total 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 Metropolitan West. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metropolitan West Total has no effect on the direction of Siit High i.e., Siit High and Metropolitan West go up and down completely randomly.
Pair Corralation between Siit High and Metropolitan West
Assuming the 90 days horizon Siit High Yield is expected to generate 0.57 times more return on investment than Metropolitan West. However, Siit High Yield is 1.74 times less risky than Metropolitan West. It trades about 0.23 of its potential returns per unit of risk. Metropolitan West Total is currently generating about 0.09 per unit of risk. If you would invest 713.00 in Siit High Yield on September 12, 2024 and sell it today you would earn a total of 7.00 from holding Siit High Yield or generate 0.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Siit High Yield vs. Metropolitan West Total
Performance |
| Timeline |
| Siit High Yield |
| Metropolitan West Total |
Siit High and Metropolitan West Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Siit High and Metropolitan West
The main advantage of trading using opposite Siit High and Metropolitan West positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siit High position performs unexpectedly, Metropolitan West 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 Metropolitan West will offset losses from the drop in Metropolitan West's long position.| Siit High vs. John Hancock Financial | Siit High vs. Davis Financial Fund | Siit High vs. Goldman Sachs Financial | Siit High vs. Fidelity Advisor Financial |
| Metropolitan West vs. Investec Emerging Markets | Metropolitan West vs. Mid Cap 15x Strategy | Metropolitan West vs. Doubleline Emerging Markets | Metropolitan West vs. Shelton Emerging Markets |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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