Correlation Between Siit Ultra and New Economy
Can any of the company-specific risk be diversified away by investing in both Siit Ultra and New Economy 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 Siit Ultra and New Economy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Siit Ultra Short and New Economy Fund, you can compare the effects of market volatilities on Siit Ultra and New Economy 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 Siit Ultra with a short position of New Economy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siit Ultra and New Economy.
Diversification Opportunities for Siit Ultra and New Economy
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Siit and New is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Siit Ultra Short and New Economy Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Economy Fund and Siit Ultra 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 Siit Ultra Short are associated (or correlated) with New Economy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Economy Fund has no effect on the direction of Siit Ultra i.e., Siit Ultra and New Economy go up and down completely randomly.
Pair Corralation between Siit Ultra and New Economy
Assuming the 90 days horizon Siit Ultra is expected to generate 4.13 times less return on investment than New Economy. But when comparing it to its historical volatility, Siit Ultra Short is 9.26 times less risky than New Economy. It trades about 0.17 of its potential returns per unit of risk. New Economy Fund is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 6,749 in New Economy Fund on August 31, 2024 and sell it today you would earn a total of 106.00 from holding New Economy Fund or generate 1.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Siit Ultra Short vs. New Economy Fund
Performance |
| Timeline |
| Siit Ultra Short |
| New Economy Fund |
Siit Ultra and New Economy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Siit Ultra and New Economy
The main advantage of trading using opposite Siit Ultra and New Economy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siit Ultra position performs unexpectedly, New Economy 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 New Economy will offset losses from the drop in New Economy's long position.| Siit Ultra vs. Fidelity Managed Retirement | Siit Ultra vs. Target Retirement 2040 | Siit Ultra vs. Lifestyle Ii Moderate | Siit Ultra vs. Strategic Allocation Moderate |
| New Economy vs. T Rowe Price | New Economy vs. The National Tax Free | New Economy vs. Nuveen Arizona Municipal | New Economy vs. Gamco Global Telecommunications |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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