Correlation Between Sit Government and Kentucky Tax
Can any of the company-specific risk be diversified away by investing in both Sit Government and Kentucky Tax 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 Government and Kentucky Tax into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sit Government Securities and Kentucky Tax Free Short To Medium, you can compare the effects of market volatilities on Sit Government and Kentucky Tax 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 Government with a short position of Kentucky Tax. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sit Government and Kentucky Tax.
Diversification Opportunities for Sit Government and Kentucky Tax
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sit and Kentucky is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Sit Government Securities and Kentucky Tax Free Short To Med in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kentucky Tax Free and Sit Government 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 Government Securities are associated (or correlated) with Kentucky Tax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kentucky Tax Free has no effect on the direction of Sit Government i.e., Sit Government and Kentucky Tax go up and down completely randomly.
Pair Corralation between Sit Government and Kentucky Tax
Assuming the 90 days horizon Sit Government Securities is expected to under-perform the Kentucky Tax. In addition to that, Sit Government is 1.88 times more volatile than Kentucky Tax Free Short To Medium. It trades about -0.24 of its total potential returns per unit of risk. Kentucky Tax Free Short To Medium is currently generating about -0.18 per unit of volatility. If you would invest 514.00 in Kentucky Tax Free Short To Medium on September 25, 2024 and sell it today you would lose (2.00) from holding Kentucky Tax Free Short To Medium or give up 0.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sit Government Securities vs. Kentucky Tax Free Short To Med
Performance |
| Timeline |
| Sit Government Securities |
| Kentucky Tax Free |
Sit Government and Kentucky Tax Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sit Government and Kentucky Tax
The main advantage of trading using opposite Sit Government and Kentucky Tax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sit Government position performs unexpectedly, Kentucky Tax 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 Kentucky Tax will offset losses from the drop in Kentucky Tax's long position.| Sit Government vs. Sit Small Cap | Sit Government vs. Sit Global Dividend | Sit Government vs. Sit Global Dividend | Sit Government vs. Sit Small Cap |
| Kentucky Tax vs. Dws Government Money | Kentucky Tax vs. Intermediate Government Bond | Kentucky Tax vs. Schwab Government Money | Kentucky Tax vs. Sit Government Securities |
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 Stocks Directory module to find actively traded stocks across global markets.
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