Correlation Between Thompson Bond and Sit U
Can any of the company-specific risk be diversified away by investing in both Thompson Bond and Sit U 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 Thompson Bond and Sit U into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thompson Bond Fund and Sit U S, you can compare the effects of market volatilities on Thompson Bond and Sit U 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 Thompson Bond with a short position of Sit U. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thompson Bond and Sit U.
Diversification Opportunities for Thompson Bond and Sit U
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Thompson and Sit is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Thompson Bond Fund and Sit U S in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sit U S and Thompson Bond 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 Thompson Bond Fund are associated (or correlated) with Sit U. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sit U S has no effect on the direction of Thompson Bond i.e., Thompson Bond and Sit U go up and down completely randomly.
Pair Corralation between Thompson Bond and Sit U
Assuming the 90 days horizon Thompson Bond Fund is expected to generate 0.49 times more return on investment than Sit U. However, Thompson Bond Fund is 2.02 times less risky than Sit U. It trades about 0.25 of its potential returns per unit of risk. Sit U S is currently generating about 0.04 per unit of risk. If you would invest 885.00 in Thompson Bond Fund on August 30, 2024 and sell it today you would earn a total of 164.00 from holding Thompson Bond Fund or generate 18.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thompson Bond Fund vs. Sit U S
Performance |
| Timeline |
| Thompson Bond |
| Sit U S |
Thompson Bond and Sit U Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thompson Bond and Sit U
The main advantage of trading using opposite Thompson Bond and Sit U positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thompson Bond position performs unexpectedly, Sit U 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 U will offset losses from the drop in Sit U's long position.| Thompson Bond vs. Tcw Total Return | Thompson Bond vs. Amg Yacktman Focused | Thompson Bond vs. Fidelity Advisor Floating | Thompson Bond vs. Doubleline Total Return |
| Sit U vs. Tcw Total Return | Sit U vs. Ridgeworth Seix Government | Sit U vs. Short Duration Income | Sit U vs. Thompson Bond Fund |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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