Correlation Between Sit Balanced and Sit Large
Can any of the company-specific risk be diversified away by investing in both Sit Balanced and Sit Large 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 Sit Balanced and Sit Large into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sit Balanced Fund and Sit Large Cap, you can compare the effects of market volatilities on Sit Balanced and Sit Large 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 Sit Balanced with a short position of Sit Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sit Balanced and Sit Large.
Diversification Opportunities for Sit Balanced and Sit Large
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between SIT and Sit is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Sit Balanced Fund and Sit Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sit Large Cap and Sit Balanced 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 Sit Balanced Fund are associated (or correlated) with Sit Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sit Large Cap has no effect on the direction of Sit Balanced i.e., Sit Balanced and Sit Large go up and down completely randomly.
Pair Corralation between Sit Balanced and Sit Large
Assuming the 90 days horizon Sit Balanced is expected to generate 1.38 times less return on investment than Sit Large. But when comparing it to its historical volatility, Sit Balanced Fund is 1.65 times less risky than Sit Large. It trades about 0.11 of its potential returns per unit of risk. Sit Large Cap is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 4,925 in Sit Large Cap on August 30, 2024 and sell it today you would earn a total of 2,941 from holding Sit Large Cap or generate 59.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sit Balanced Fund vs. Sit Large Cap
Performance |
| Timeline |
| Sit Balanced |
| Sit Large Cap |
Sit Balanced and Sit Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sit Balanced and Sit Large
The main advantage of trading using opposite Sit Balanced and Sit Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sit Balanced position performs unexpectedly, Sit Large 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 Sit Large will offset losses from the drop in Sit Large's long position.| Sit Balanced vs. Value Line Asset | Sit Balanced vs. Sit Large Cap | Sit Balanced vs. Sit Small Cap | Sit Balanced vs. Plumb Balanced Fund |
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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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