Correlation Between Siit Large and Arbitrage Fund
Can any of the company-specific risk be diversified away by investing in both Siit Large and Arbitrage Fund 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 Large and Arbitrage Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Siit Large Cap and The Arbitrage Fund, you can compare the effects of market volatilities on Siit Large and Arbitrage Fund 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 Large with a short position of Arbitrage Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siit Large and Arbitrage Fund.
Diversification Opportunities for Siit Large and Arbitrage Fund
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Siit and Arbitrage is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Siit Large Cap and The Arbitrage Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arbitrage Fund and Siit Large 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 Large Cap are associated (or correlated) with Arbitrage Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arbitrage Fund has no effect on the direction of Siit Large i.e., Siit Large and Arbitrage Fund go up and down completely randomly.
Pair Corralation between Siit Large and Arbitrage Fund
Assuming the 90 days horizon Siit Large Cap is expected to generate 5.36 times more return on investment than Arbitrage Fund. However, Siit Large is 5.36 times more volatile than The Arbitrage Fund. It trades about 0.21 of its potential returns per unit of risk. The Arbitrage Fund is currently generating about 0.31 per unit of risk. If you would invest 20,036 in Siit Large Cap on June 11, 2025 and sell it today you would earn a total of 1,665 from holding Siit Large Cap or generate 8.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 98.39% |
| Values | Daily Returns |
Siit Large Cap vs. The Arbitrage Fund
Performance |
| Timeline |
| Siit Large Cap |
| Arbitrage Fund |
Siit Large and Arbitrage Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Siit Large and Arbitrage Fund
The main advantage of trading using opposite Siit Large and Arbitrage Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siit Large position performs unexpectedly, Arbitrage Fund 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 Arbitrage Fund will offset losses from the drop in Arbitrage Fund's long position.The idea behind Siit Large Cap and The Arbitrage 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.| Arbitrage Fund vs. T Rowe Price | Arbitrage Fund vs. Gmo E Plus | Arbitrage Fund vs. Western Asset New | Arbitrage Fund vs. Balanced Fund Retail |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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