Correlation Between Sit U and Sit Us
Can any of the company-specific risk be diversified away by investing in both Sit U and Sit Us 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 Sit U and Sit Us into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sit U S and Sit Government Securities, you can compare the effects of market volatilities on Sit U and Sit Us 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 Sit U with a short position of Sit Us. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sit U and Sit Us.
Diversification Opportunities for Sit U and Sit Us
No risk reduction
The 3 months correlation between Sit and Sit is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Sit U S and Sit Government Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sit Government Securities and Sit U 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 Sit U S are associated (or correlated) with Sit Us. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sit Government Securities has no effect on the direction of Sit U i.e., Sit U and Sit Us go up and down completely randomly.
Pair Corralation between Sit U and Sit Us
Assuming the 90 days horizon Sit U S is expected to generate about the same return on investment as Sit Government Securities. But, Sit U S is 1.03 times less risky than Sit Us. It trades about 0.15 of its potential returns per unit of risk. Sit Government Securities is currently generating about 0.14 per unit of risk. If you would invest 1,030 in Sit Government Securities on September 2, 2025 and sell it today you would earn a total of 17.00 from holding Sit Government Securities or generate 1.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sit U S vs. Sit Government Securities
Performance |
| Timeline |
| Sit U S |
| Sit Government Securities |
Sit U and Sit Us Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sit U and Sit Us
The main advantage of trading using opposite Sit U and Sit Us positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sit U position performs unexpectedly, Sit Us 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 Us will offset losses from the drop in Sit Us' long position.| Sit U vs. Ab Global Risk | Sit U vs. California High Yield Municipal | Sit U vs. John Hancock High | Sit U vs. Ab High Income |
| Sit Us vs. World Precious Minerals | Sit Us vs. Gabelli Gold Fund | Sit Us vs. Vy Goldman Sachs | Sit Us vs. James Balanced Golden |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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