Correlation Between Sit Government and Sit Minnesota
Can any of the company-specific risk be diversified away by investing in both Sit Government and Sit Minnesota 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 Sit Minnesota 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 Sit Minnesota Tax Free, you can compare the effects of market volatilities on Sit Government and Sit Minnesota 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 Sit Minnesota. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sit Government and Sit Minnesota.
Diversification Opportunities for Sit Government and Sit Minnesota
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Sit and Sit is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Sit Government Securities and Sit Minnesota Tax Free in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sit Minnesota Tax 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 Sit Minnesota. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sit Minnesota Tax has no effect on the direction of Sit Government i.e., Sit Government and Sit Minnesota go up and down completely randomly.
Pair Corralation between Sit Government and Sit Minnesota
Assuming the 90 days horizon Sit Government is expected to generate 1.1 times less return on investment than Sit Minnesota. In addition to that, Sit Government is 1.06 times more volatile than Sit Minnesota Tax Free. It trades about 0.07 of its total potential returns per unit of risk. Sit Minnesota Tax Free is currently generating about 0.08 per unit of volatility. If you would invest 908.00 in Sit Minnesota Tax Free on September 12, 2024 and sell it today you would earn a total of 61.00 from holding Sit Minnesota Tax Free or generate 6.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sit Government Securities vs. Sit Minnesota Tax Free
Performance |
| Timeline |
| Sit Government Securities |
| Sit Minnesota Tax |
Sit Government and Sit Minnesota Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sit Government and Sit Minnesota
The main advantage of trading using opposite Sit Government and Sit Minnesota positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sit Government position performs unexpectedly, Sit Minnesota 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 Minnesota will offset losses from the drop in Sit Minnesota's long position.| Sit Government vs. SCOR PK | Sit Government vs. Morningstar Unconstrained Allocation | Sit Government vs. Via Renewables | Sit Government vs. Bondbloxx ETF Trust |
| Sit Minnesota vs. Inverse Government Long | Sit Minnesota vs. Dunham Porategovernment Bond | Sit Minnesota vs. Dws Government Money | Sit Minnesota 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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