Correlation Between Sit Balanced and Dennys Corp

Can any of the company-specific risk be diversified away by investing in both Sit Balanced and Dennys Corp 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 Balanced and Dennys Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Sit Balanced Fund and Dennys Corp, you can compare the effects of market volatilities on Sit Balanced and Dennys Corp 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 Balanced with a short position of Dennys Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sit Balanced and Dennys Corp.

Diversification Opportunities for Sit Balanced and Dennys Corp

0.0

Correlation Coefficient

Sit Balanced  Dennys Corp

Pay attention - limited upside

The 3 months correlation between Sit and Dennys is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Sit Balanced Fund and Dennys Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dennys Corp and Sit Balanced 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 Balanced Fund are associated (or correlated) with Dennys Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dennys Corp has no effect on the direction of Sit Balanced i.e., Sit Balanced and Dennys Corp go up and down completely randomly.

Pair Corralation between Sit Balanced and Dennys Corp

If you would invest (100.00) in Sit Balanced Fund on February 23, 2024 and sell it today you would earn a total of  100.00  from holding Sit Balanced Fund or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Sit Balanced Fund  vs.  Dennys Corp

Sit Balanced

Risk-Adjusted Performance

0 of 100

Modest

Over the last 90 days Sit Balanced Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Sit Balanced is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Dennys Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dennys Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in June 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Sit Balanced and Dennys Corp

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

The idea behind Sit Balanced Fund and Dennys Corp 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.

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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.