Correlation Between Siit Global and Capital World
Can any of the company-specific risk be diversified away by investing in both Siit Global and Capital World 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 Global and Capital World into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Siit Global Managed and Capital World Growth, you can compare the effects of market volatilities on Siit Global and Capital World 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 Global with a short position of Capital World. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siit Global and Capital World.
Diversification Opportunities for Siit Global and Capital World
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Siit and Capital is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Siit Global Managed and Capital World Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital World Growth and Siit Global 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 Global Managed are associated (or correlated) with Capital World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital World Growth has no effect on the direction of Siit Global i.e., Siit Global and Capital World go up and down completely randomly.
Pair Corralation between Siit Global and Capital World
Assuming the 90 days horizon Siit Global is expected to generate 1.37 times less return on investment than Capital World. But when comparing it to its historical volatility, Siit Global Managed is 1.41 times less risky than Capital World. It trades about 0.1 of its potential returns per unit of risk. Capital World Growth is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 5,328 in Capital World Growth on January 25, 2024 and sell it today you would earn a total of 979.00 from holding Capital World Growth or generate 18.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Siit Global Managed vs. Capital World Growth
Performance |
| Timeline |
| Siit Global Managed |
| Capital World Growth |
Siit Global and Capital World Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Siit Global and Capital World
The main advantage of trading using opposite Siit Global and Capital World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siit Global position performs unexpectedly, Capital World 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 Capital World will offset losses from the drop in Capital World's long position.| Siit Global vs. Saat Aggressive Strategy | Siit Global vs. Simt Sp 500 | Siit Global vs. Saat Servative Strategy | Siit Global vs. Stet California Municipal |
| Capital World vs. Income Fund Of | Capital World vs. New World Fund | Capital World vs. American Mutual Fund | Capital World vs. American Mutual Fund |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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