Correlation Between Sit Large and Plumb Balanced
Can any of the company-specific risk be diversified away by investing in both Sit Large and Plumb 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 Large and Plumb Balanced into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sit Large Cap and Plumb Balanced Fund, you can compare the effects of market volatilities on Sit Large and Plumb 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 Large with a short position of Plumb Balanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sit Large and Plumb Balanced.
Diversification Opportunities for Sit Large and Plumb Balanced
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sit and Plumb is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Sit Large Cap and Plumb Balanced Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Plumb Balanced and Sit Large 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 Large Cap are associated (or correlated) with Plumb Balanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Plumb Balanced has no effect on the direction of Sit Large i.e., Sit Large and Plumb Balanced go up and down completely randomly.
Pair Corralation between Sit Large and Plumb Balanced
Assuming the 90 days horizon Sit Large Cap is expected to under-perform the Plumb Balanced. In addition to that, Sit Large is 1.56 times more volatile than Plumb Balanced Fund. It trades about -0.1 of its total potential returns per unit of risk. Plumb Balanced Fund is currently generating about -0.06 per unit of volatility. If you would invest 3,702 in Plumb Balanced Fund on November 28, 2024 and sell it today you would lose (27.00) from holding Plumb Balanced Fund or give up 0.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sit Large Cap vs. Plumb Balanced Fund
Performance |
| Timeline |
| Sit Large Cap |
| Plumb Balanced |
Sit Large and Plumb Balanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sit Large and Plumb Balanced
The main advantage of trading using opposite Sit Large and Plumb Balanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sit Large position performs unexpectedly, Plumb 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 Plumb Balanced will offset losses from the drop in Plumb Balanced's long position.| Sit Large vs. Pnc Emerging Markets | Sit Large vs. Transamerica Emerging Markets | Sit Large vs. Barings Emerging Markets | Sit Large vs. Calvert Developed Market |
| Plumb Balanced vs. Plumb Equity Fund | Plumb Balanced vs. Value Line Asset | Plumb Balanced vs. Sit Balanced Fund | Plumb Balanced vs. Performance Trust Strategic |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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