Correlation Between Western Asset and Sit Minnesota
Can any of the company-specific risk be diversified away by investing in both Western Asset and Sit Minnesota 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 Western Asset and Sit Minnesota into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Asset Inflation and Sit Minnesota Tax Free, you can compare the effects of market volatilities on Western Asset and Sit Minnesota 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 Western Asset with a short position of Sit Minnesota. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Sit Minnesota.
Diversification Opportunities for Western Asset and Sit Minnesota
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Western and SIT is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Inflation and Sit Minnesota Tax Free in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sit Minnesota Tax and Western Asset 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 Western Asset Inflation are associated (or correlated) with Sit Minnesota. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sit Minnesota Tax has no effect on the direction of Western Asset i.e., Western Asset and Sit Minnesota go up and down completely randomly.
Pair Corralation between Western Asset and Sit Minnesota
Assuming the 90 days horizon Western Asset is expected to generate 1.77 times less return on investment than Sit Minnesota. In addition to that, Western Asset is 1.31 times more volatile than Sit Minnesota Tax Free. It trades about 0.07 of its total potential returns per unit of risk. Sit Minnesota Tax Free is currently generating about 0.16 per unit of volatility. If you would invest 921.00 in Sit Minnesota Tax Free on September 1, 2024 and sell it today you would earn a total of 46.00 from holding Sit Minnesota Tax Free or generate 4.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Western Asset Inflation vs. Sit Minnesota Tax Free
Performance |
| Timeline |
| Western Asset Inflation |
| Sit Minnesota Tax |
Western Asset and Sit Minnesota Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Sit Minnesota
The main advantage of trading using opposite Western Asset and Sit Minnesota positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Sit Minnesota 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 Minnesota will offset losses from the drop in Sit Minnesota's long position.| Western Asset vs. Iaadx | Western Asset vs. Abr 7525 Volatility | Western Asset vs. Ab Value Fund | Western Asset vs. Bbh Partner Fund |
| Sit Minnesota vs. Bbh Intermediate Municipal | Sit Minnesota vs. Ft 7934 Corporate | Sit Minnesota vs. California Bond Fund | Sit Minnesota vs. Multisector Bond Sma |
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 CEOs Directory module to screen CEOs from public companies around the world.
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