Correlation Between Siit Emerging and California Bond
Can any of the company-specific risk be diversified away by investing in both Siit Emerging and California Bond 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 Emerging and California Bond into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Siit Emerging Markets and California Bond Fund, you can compare the effects of market volatilities on Siit Emerging and California Bond 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 Emerging with a short position of California Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siit Emerging and California Bond.
Diversification Opportunities for Siit Emerging and California Bond
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Siit and California is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Siit Emerging Markets and California Bond Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on California Bond and Siit Emerging 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 Emerging Markets are associated (or correlated) with California Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of California Bond has no effect on the direction of Siit Emerging i.e., Siit Emerging and California Bond go up and down completely randomly.
Pair Corralation between Siit Emerging and California Bond
Assuming the 90 days horizon Siit Emerging Markets is expected to under-perform the California Bond. In addition to that, Siit Emerging is 1.98 times more volatile than California Bond Fund. It trades about -0.16 of its total potential returns per unit of risk. California Bond Fund is currently generating about 0.2 per unit of volatility. If you would invest 1,032 in California Bond Fund on August 29, 2024 and sell it today you would earn a total of 16.00 from holding California Bond Fund or generate 1.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Siit Emerging Markets vs. California Bond Fund
Performance |
| Timeline |
| Siit Emerging Markets |
| California Bond |
Siit Emerging and California Bond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Siit Emerging and California Bond
The main advantage of trading using opposite Siit Emerging and California Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siit Emerging position performs unexpectedly, California Bond 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 California Bond will offset losses from the drop in California Bond's long position.| Siit Emerging vs. Firsthand Technology Opportunities | Siit Emerging vs. Global Technology Portfolio | Siit Emerging vs. Towpath Technology | Siit Emerging vs. Science Technology Fund |
| California Bond vs. Tax Exempt Fund Of | California Bond vs. HUMANA INC | California Bond vs. Aquagold International | California Bond vs. Barloworld Ltd ADR |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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