Correlation Between Siit High and Sa Mkt

Can any of the company-specific risk be diversified away by investing in both Siit High and Sa Mkt 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 Sa Mkt 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 Sa Mkt Fd, you can compare the effects of market volatilities on Siit High and Sa Mkt 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 Sa Mkt. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siit High and Sa Mkt.

Diversification Opportunities for Siit High and Sa Mkt

0.83

Correlation Coefficient

Siit High  Sa Mkt

Very poor diversification

The 3 months correlation between Siit and SAMKX is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Siit High Yield and Sa Mkt Fd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sa Mkt Fd 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 Sa Mkt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sa Mkt Fd has no effect on the direction of Siit High i.e., Siit High and Sa Mkt go up and down completely randomly.

Pair Corralation between Siit High and Sa Mkt

Assuming the 90 days horizon Siit High is expected to generate 4.24 times less return on investment than Sa Mkt. But when comparing it to its historical volatility, Siit High Yield is 4.09 times less risky than Sa Mkt. It trades about 0.19 of its potential returns per unit of risk. Sa Mkt Fd is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  3,433  in Sa Mkt Fd on September 3, 2024 and sell it today you would earn a total of  316.00  from holding Sa Mkt Fd or generate 9.2% return on investment over 90 days.

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

Siit High Yield  vs.  Sa Mkt Fd

Siit High Yield

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Siit High Yield are ranked lower than 14 (%) 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 current stock price disturbance, may contribute to short-term losses for the investors.

Sa Mkt Fd

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sa Mkt Fd are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward-looking signals, Sa Mkt may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Siit High and Sa Mkt

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

The idea behind Siit High Yield and Sa Mkt Fd 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.