Correlation Between Sit U and Sit Balanced
Can any of the company-specific risk be diversified away by investing in both Sit U and Sit Balanced 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 Balanced 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 Balanced Fund, you can compare the effects of market volatilities on Sit U and Sit Balanced 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 Balanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sit U and Sit Balanced.
Diversification Opportunities for Sit U and Sit Balanced
-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 Balanced Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sit Balanced 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 Balanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sit Balanced has no effect on the direction of Sit U i.e., Sit U and Sit Balanced go up and down completely randomly.
Pair Corralation between Sit U and Sit Balanced
Assuming the 90 days horizon Sit U S is expected to under-perform the Sit Balanced. But the mutual fund apears to be less risky and, when comparing its historical volatility, Sit U S is 3.4 times less risky than Sit Balanced. The mutual fund trades about -0.05 of its potential returns per unit of risk. The Sit Balanced Fund is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 3,528 in Sit Balanced Fund on August 26, 2024 and sell it today you would earn a total of 49.00 from holding Sit Balanced Fund or generate 1.39% 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 Balanced Fund
Performance |
| Timeline |
| Sit U S |
| Sit Balanced |
Sit U and Sit Balanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sit U and Sit Balanced
The main advantage of trading using opposite Sit U and Sit Balanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sit U position performs unexpectedly, Sit Balanced 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 Balanced will offset losses from the drop in Sit Balanced'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 Balanced vs. Value Line Asset | Sit Balanced vs. Sit Large Cap | Sit Balanced vs. Sit Small Cap | Sit Balanced vs. Plumb Balanced Fund |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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