Correlation Between Performance Trust and Sit Balanced

Can any of the company-specific risk be diversified away by investing in both Performance Trust and Sit Balanced 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 Performance Trust and Sit Balanced into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Performance Trust Strategic and Sit Balanced Fund, you can compare the effects of market volatilities on Performance Trust and Sit Balanced 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 Performance Trust with a short position of Sit Balanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Performance Trust and Sit Balanced.

Diversification Opportunities for Performance Trust and Sit Balanced

-0.37

Correlation Coefficient

Performance Trust  Sit Balanced

Very good diversification

The 3 months correlation between Performance and Sit is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Performance Trust Strategic and Sit Balanced Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sit Balanced and Performance Trust 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 Performance Trust Strategic are associated (or correlated) with Sit Balanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sit Balanced has no effect on the direction of Performance Trust i.e., Performance Trust and Sit Balanced go up and down completely randomly.

Pair Corralation between Performance Trust and Sit Balanced

Assuming the 90 days horizon Performance Trust Strategic is expected to under-perform the Sit Balanced. But the mutual fund apears to be less risky and, when comparing its historical volatility, Performance Trust Strategic is 1.7 times less risky than Sit Balanced. The mutual fund trades about -0.11 of its potential returns per unit of risk. The Sit Balanced Fund is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  3,484  in Sit Balanced Fund on September 14, 2024 and sell it today you would earn a total of  171.00  from holding Sit Balanced Fund or generate 4.91% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Performance Trust Strategic  vs.  Sit Balanced Fund

Performance Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Performance Trust Strategic has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Performance Trust is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Sit Balanced

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sit Balanced Fund are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Sit Balanced is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Performance Trust and Sit Balanced

The main advantage of trading using opposite Performance Trust and Sit Balanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Performance Trust position performs unexpectedly, Sit Balanced 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 Balanced will offset losses from the drop in Sit Balanced's long position.

The idea behind Performance Trust Strategic and Sit Balanced Fund pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.