Correlation Between Sit Large and Value Line
Can any of the company-specific risk be diversified away by investing in both Sit Large and Value Line 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 Value Line 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 Value Line Asset, you can compare the effects of market volatilities on Sit Large and Value Line 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 Value Line. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sit Large and Value Line.
Diversification Opportunities for Sit Large and Value Line
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sit and Value is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Sit Large Cap and Value Line Asset in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Value Line Asset 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 Value Line. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Value Line Asset has no effect on the direction of Sit Large i.e., Sit Large and Value Line go up and down completely randomly.
Pair Corralation between Sit Large and Value Line
Assuming the 90 days horizon Sit Large Cap is expected to generate 1.73 times more return on investment than Value Line. However, Sit Large is 1.73 times more volatile than Value Line Asset. It trades about 0.1 of its potential returns per unit of risk. Value Line Asset is currently generating about 0.13 per unit of risk. If you would invest 5,667 in Sit Large Cap on September 2, 2024 and sell it today you would earn a total of 2,257 from holding Sit Large Cap or generate 39.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sit Large Cap vs. Value Line Asset
Performance |
| Timeline |
| Sit Large Cap |
| Value Line Asset |
Sit Large and Value Line Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sit Large and Value Line
The main advantage of trading using opposite Sit Large and Value Line positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sit Large position performs unexpectedly, Value Line 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 Value Line will offset losses from the drop in Value Line's long position.| Sit Large vs. Sit Small Cap | Sit Large vs. Sit Global Dividend | Sit Large vs. Sit Small Cap | Sit Large vs. Sit Developing Markets |
| Value Line vs. Value Line Income | Value Line vs. Value Line Premier | Value Line vs. Value Line Mid | Value Line vs. Value Line Larger |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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