Correlation Between Sit U and Sit Dividend
Can any of the company-specific risk be diversified away by investing in both Sit U and Sit Dividend 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 U and Sit Dividend into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sit U S and Sit Dividend Growth, you can compare the effects of market volatilities on Sit U and Sit Dividend 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 U with a short position of Sit Dividend. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sit U and Sit Dividend.
Diversification Opportunities for Sit U and Sit Dividend
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sit and Sit is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Sit U S and Sit Dividend Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sit Dividend Growth and Sit U 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 U S are associated (or correlated) with Sit Dividend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sit Dividend Growth has no effect on the direction of Sit U i.e., Sit U and Sit Dividend go up and down completely randomly.
Pair Corralation between Sit U and Sit Dividend
Assuming the 90 days horizon Sit U is expected to generate 3.55 times less return on investment than Sit Dividend. But when comparing it to its historical volatility, Sit U S is 3.5 times less risky than Sit Dividend. It trades about 0.14 of its potential returns per unit of risk. Sit Dividend Growth is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 1,743 in Sit Dividend Growth on August 30, 2024 and sell it today you would earn a total of 42.00 from holding Sit Dividend Growth or generate 2.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sit U S vs. Sit Dividend Growth
Performance |
| Timeline |
| Sit U S |
| Sit Dividend Growth |
Sit U and Sit Dividend Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sit U and Sit Dividend
The main advantage of trading using opposite Sit U and Sit Dividend positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sit U position performs unexpectedly, Sit Dividend 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 Dividend will offset losses from the drop in Sit Dividend's long position.| Sit U vs. Tcw Total Return | Sit U vs. Ridgeworth Seix Government | Sit U vs. Short Duration Income | Sit U vs. Thompson Bond Fund |
| Sit Dividend vs. Vanguard Total Stock | Sit Dividend vs. Vanguard 500 Index | Sit Dividend vs. Vanguard Total Stock | Sit Dividend vs. Vanguard Total Stock |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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