Correlation Between Federated Government and Sit Balanced
Can any of the company-specific risk be diversified away by investing in both Federated Government and Sit Balanced 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 Federated Government and Sit Balanced into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated Government Income and Sit Balanced Fund, you can compare the effects of market volatilities on Federated Government and Sit Balanced 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 Federated Government with a short position of Sit Balanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Government and Sit Balanced.
Diversification Opportunities for Federated Government and Sit Balanced
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Federated and Sit is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Federated Government Income and Sit Balanced Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sit Balanced and Federated Government 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 Federated Government Income are associated (or correlated) with Sit Balanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sit Balanced has no effect on the direction of Federated Government i.e., Federated Government and Sit Balanced go up and down completely randomly.
Pair Corralation between Federated Government and Sit Balanced
Assuming the 90 days horizon Federated Government is expected to generate 3.12 times less return on investment than Sit Balanced. But when comparing it to its historical volatility, Federated Government Income is 2.46 times less risky than Sit Balanced. It trades about 0.1 of its potential returns per unit of risk. Sit Balanced Fund is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 3,809 in Sit Balanced Fund on September 4, 2025 and sell it today you would earn a total of 186.00 from holding Sit Balanced Fund or generate 4.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Government Income vs. Sit Balanced Fund
Performance |
| Timeline |
| Federated Government |
| Sit Balanced |
Federated Government and Sit Balanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Government and Sit Balanced
The main advantage of trading using opposite Federated Government and Sit Balanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Government position performs unexpectedly, Sit Balanced 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 Balanced will offset losses from the drop in Sit Balanced's long position.| Federated Government vs. Rbb Fund | Federated Government vs. Auer Growth Fund | Federated Government vs. Semiconductor Ultrasector Profund | Federated Government vs. Eip Growth And |
| Sit Balanced vs. Janus Global Technology | Sit Balanced vs. Dreyfus Technology Growth | Sit Balanced vs. Blackrock Science Technology | Sit Balanced vs. Towpath Technology |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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