Correlation Between Ab Global and Sit Mutual

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

By analyzing existing cross correlation between Ab Global Risk and Sit Mutual Funds, you can compare the effects of market volatilities on Ab Global and Sit Mutual 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 Ab Global with a short position of Sit Mutual. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Global and Sit Mutual.

Diversification Opportunities for Ab Global and Sit Mutual

0.29

Correlation Coefficient

Ab Global  Sit Mutual

Modest diversification

The 3 months correlation between CBSYX and Sit is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Ab Global Risk and Sit Mutual Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sit Mutual Funds and Ab Global 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 Ab Global Risk are associated (or correlated) with Sit Mutual. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sit Mutual Funds has no effect on the direction of Ab Global i.e., Ab Global and Sit Mutual go up and down completely randomly.

Pair Corralation between Ab Global and Sit Mutual

Assuming the 90 days horizon Ab Global is expected to generate 1.96 times less return on investment than Sit Mutual. In addition to that, Ab Global is 2.74 times more volatile than Sit Mutual Funds. It trades about 0.03 of its total potential returns per unit of risk. Sit Mutual Funds is currently generating about 0.18 per unit of volatility. If you would invest  940.00  in Sit Mutual Funds on December 27, 2024 and sell it today you would earn a total of  17.00  from holding Sit Mutual Funds or generate 1.81% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Ab Global Risk  vs.  Sit Mutual Funds

Ab Global Risk

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Ab Global Risk are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Ab Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Sit Mutual Funds

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sit Mutual Funds are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Sit Mutual is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Ab Global and Sit Mutual

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

The idea behind Ab Global Risk and Sit Mutual Funds 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.