Correlation Between Siit High and High Income

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

By analyzing existing cross correlation between Siit High Yield and High Income Fund, you can compare the effects of market volatilities on Siit High and High Income 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 High with a short position of High Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siit High and High Income.

Diversification Opportunities for Siit High and High Income

0.76

Correlation Coefficient

Siit High  High Income

Poor diversification

The 3 months correlation between Siit and High is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Siit High Yield and High Income Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on High Income Fund and Siit High 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 High Yield are associated (or correlated) with High Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of High Income Fund has no effect on the direction of Siit High i.e., Siit High and High Income go up and down completely randomly.

Pair Corralation between Siit High and High Income

Assuming the 90 days horizon Siit High is expected to generate 1.02 times less return on investment than High Income. In addition to that, Siit High is 1.11 times more volatile than High Income Fund. It trades about 0.12 of its total potential returns per unit of risk. High Income Fund is currently generating about 0.14 per unit of volatility. If you would invest  715.00  in High Income Fund on September 12, 2024 and sell it today you would earn a total of  160.00  from holding High Income Fund or generate 22.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	99.8%
Values	Daily Returns

Siit High Yield  vs.  High Income Fund

Siit High Yield

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Siit High Yield are ranked lower than 18 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Siit High is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

High Income Fund

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in High Income Fund are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, High Income 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 High and High Income

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

The idea behind Siit High Yield and High Income 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 Commodity Directory module to find actively traded commodities issued by global exchanges.