Correlation Between Siit High and Income Fund
Can any of the company-specific risk be diversified away by investing in both Siit High and Income Fund 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 Income Fund 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 Income Fund Of, you can compare the effects of market volatilities on Siit High and Income Fund 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 Income Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siit High and Income Fund.
Diversification Opportunities for Siit High and Income Fund
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Siit and Income is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Siit High Yield and Income Fund Of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Income 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 Income Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Income Fund has no effect on the direction of Siit High i.e., Siit High and Income Fund go up and down completely randomly.
Pair Corralation between Siit High and Income Fund
Assuming the 90 days horizon Siit High is expected to generate 1.24 times less return on investment than Income Fund. But when comparing it to its historical volatility, Siit High Yield is 1.51 times less risky than Income Fund. It trades about 0.12 of its potential returns per unit of risk. Income Fund Of is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 2,150 in Income Fund Of on August 31, 2024 and sell it today you would earn a total of 426.00 from holding Income Fund Of or generate 19.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Siit High Yield vs. Income Fund Of
Performance |
| Timeline |
| Siit High Yield |
| Income Fund |
Siit High and Income Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Siit High and Income Fund
The main advantage of trading using opposite Siit High and Income Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siit High position performs unexpectedly, Income Fund 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 Income Fund will offset losses from the drop in Income Fund's long position.| Siit High vs. Vanguard High Yield Corporate | Siit High vs. Vanguard High Yield Porate | Siit High vs. Blackrock Hi Yld | Siit High vs. Blackrock High Yield |
| Income Fund vs. Msift High Yield | Income Fund vs. Siit High Yield | Income Fund vs. Multi Manager High Yield | Income Fund vs. Alpine 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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