Correlation Between Siit Large and Catholic Values

Can any of the company-specific risk be diversified away by investing in both Siit Large and Catholic Values 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 Large and Catholic Values into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Siit Large Cap and Catholic Values Fixed, you can compare the effects of market volatilities on Siit Large and Catholic Values 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 Large with a short position of Catholic Values. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siit Large and Catholic Values.

Diversification Opportunities for Siit Large and Catholic Values

-0.17

Correlation Coefficient

Siit Large  Catholic Values

Good diversification

The 3 months correlation between Siit and Catholic is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Siit Large Cap and Catholic Values Fixed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catholic Values Fixed and Siit Large 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 Large Cap are associated (or correlated) with Catholic Values. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catholic Values Fixed has no effect on the direction of Siit Large i.e., Siit Large and Catholic Values go up and down completely randomly.

Pair Corralation between Siit Large and Catholic Values

Assuming the 90 days horizon Siit Large Cap is expected to under-perform the Catholic Values. In addition to that, Siit Large is 10.51 times more volatile than Catholic Values Fixed. It trades about -0.17 of its total potential returns per unit of risk. Catholic Values Fixed is currently generating about -0.12 per unit of volatility. If you would invest  859.00  in Catholic Values Fixed on September 21, 2024 and sell it today you would lose (8.00) from holding Catholic Values Fixed or give up 0.93% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Siit Large Cap  vs.  Catholic Values Fixed

Siit Large Cap

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Siit Large Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Catholic Values Fixed

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Siit Large and Catholic Values

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

The idea behind Siit Large Cap and Catholic Values Fixed 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.