Correlation Between Siit High and Western Asset
Can any of the company-specific risk be diversified away by investing in both Siit High and Western Asset 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 Western Asset 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 Western Asset High, you can compare the effects of market volatilities on Siit High and Western Asset 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 Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siit High and Western Asset.
Diversification Opportunities for Siit High and Western Asset
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Siit and Western is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Siit High Yield and Western Asset High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset High 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 Western Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Asset High has no effect on the direction of Siit High i.e., Siit High and Western Asset go up and down completely randomly.
Pair Corralation between Siit High and Western Asset
Assuming the 90 days horizon Siit High is expected to generate 1.01 times less return on investment than Western Asset. In addition to that, Siit High is 1.08 times more volatile than Western Asset High. It trades about 0.14 of its total potential returns per unit of risk. Western Asset High is currently generating about 0.16 per unit of volatility. If you would invest 701.00 in Western Asset High on August 28, 2024 and sell it today you would earn a total of 4.00 from holding Western Asset High or generate 0.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Siit High Yield vs. Western Asset High
Performance |
| Timeline |
| Siit High Yield |
| Western Asset High |
Siit High and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Siit High and Western Asset
The main advantage of trading using opposite Siit High and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siit High position performs unexpectedly, Western Asset 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 Western Asset will offset losses from the drop in Western Asset's long position.| Siit High vs. Artisan High Income | Siit High vs. Sit Emerging Markets | Siit High vs. Sit International Equity | Siit High vs. Stet Intermediate Term |
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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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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