Correlation Between Siit World and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Siit World and Dow Jones 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 World and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Siit World Select and Dow Jones Industrial, you can compare the effects of market volatilities on Siit World and Dow Jones 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 World with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siit World and Dow Jones.
Diversification Opportunities for Siit World and Dow Jones
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Siit and Dow is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Siit World Select and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and Siit World 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 World Select are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Siit World i.e., Siit World and Dow Jones go up and down completely randomly.
Pair Corralation between Siit World and Dow Jones
Assuming the 90 days horizon Siit World Select is expected to generate 0.96 times more return on investment than Dow Jones. However, Siit World Select is 1.05 times less risky than Dow Jones. It trades about 0.1 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.08 per unit of risk. If you would invest 959.00 in Siit World Select on September 14, 2024 and sell it today you would earn a total of 357.00 from holding Siit World Select or generate 37.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.8% |
| Values | Daily Returns |
Siit World Select vs. Dow Jones Industrial
Performance |
| Timeline |
Siit World and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Siit World Select
Pair trading matchups for Siit World
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Siit World and Dow Jones
The main advantage of trading using opposite Siit World and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siit World position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Siit World vs. Simt Multi Asset Accumulation | Siit World vs. Saat Market Growth | Siit World vs. Simt Real Return | Siit World vs. Simt Small Cap |
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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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