Correlation Between Siit Ultra and Multimanager Lifestyle

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

By analyzing existing cross correlation between Siit Ultra Short and Multimanager Lifestyle Moderate, you can compare the effects of market volatilities on Siit Ultra and Multimanager Lifestyle 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 Ultra with a short position of Multimanager Lifestyle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siit Ultra and Multimanager Lifestyle.

Diversification Opportunities for Siit Ultra and Multimanager Lifestyle

-0.19

Correlation Coefficient

Siit Ultra  Multimanager Lifestyle

Good diversification

The 3 months correlation between Siit and Multimanager is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Siit Ultra Short and Multimanager Lifestyle Moderat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multimanager Lifestyle and Siit Ultra 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 Ultra Short are associated (or correlated) with Multimanager Lifestyle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multimanager Lifestyle has no effect on the direction of Siit Ultra i.e., Siit Ultra and Multimanager Lifestyle go up and down completely randomly.

Pair Corralation between Siit Ultra and Multimanager Lifestyle

Assuming the 90 days horizon Siit Ultra Short is expected to generate about the same return on investment as Multimanager Lifestyle Moderate. But, Siit Ultra Short is 3.74 times less risky than Multimanager Lifestyle. It trades about 0.21 of its potential returns per unit of risk. Multimanager Lifestyle Moderate is currently generating about 0.05 per unit of risk. If you would invest  1,131  in Multimanager Lifestyle Moderate on October 24, 2024 and sell it today you would earn a total of  123.00  from holding Multimanager Lifestyle Moderate or generate 10.88% return on investment over 90 days.

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

Siit Ultra Short  vs.  Multimanager Lifestyle Moderat

Siit Ultra Short

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Siit Ultra Short are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Siit Ultra is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Multimanager Lifestyle

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Multimanager Lifestyle Moderate are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong primary indicators, Multimanager Lifestyle 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 Ultra and Multimanager Lifestyle

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

The idea behind Siit Ultra Short and Multimanager Lifestyle Moderate 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.

Check out your portfolio center.

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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.