Correlation Between Siit High and Jennison Natural
Can any of the company-specific risk be diversified away by investing in both Siit High and Jennison Natural 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 Jennison Natural 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 Jennison Natural Resources, you can compare the effects of market volatilities on Siit High and Jennison Natural 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 Jennison Natural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siit High and Jennison Natural.
Diversification Opportunities for Siit High and Jennison Natural
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Siit and Jennison is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Siit High Yield and Jennison Natural Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jennison Natural Res 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 Jennison Natural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jennison Natural Res has no effect on the direction of Siit High i.e., Siit High and Jennison Natural go up and down completely randomly.
Pair Corralation between Siit High and Jennison Natural
Assuming the 90 days horizon Siit High Yield is expected to generate 0.17 times more return on investment than Jennison Natural. However, Siit High Yield is 5.84 times less risky than Jennison Natural. It trades about 0.18 of its potential returns per unit of risk. Jennison Natural Resources is currently generating about -0.05 per unit of risk. If you would invest 677.00 in Siit High Yield on September 26, 2024 and sell it today you would earn a total of 34.00 from holding Siit High Yield or generate 5.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Siit High Yield vs. Jennison Natural Resources
Performance |
| Timeline |
| Siit High Yield |
| Jennison Natural Res |
Siit High and Jennison Natural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Siit High and Jennison Natural
The main advantage of trading using opposite Siit High and Jennison Natural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siit High position performs unexpectedly, Jennison Natural 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 Jennison Natural will offset losses from the drop in Jennison Natural's long position.| Siit High vs. Nasdaq 100 2x Strategy | Siit High vs. Dws Emerging Markets | Siit High vs. Franklin Emerging Market | Siit High vs. Siit 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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