Correlation Between Sit Tax and Sit Dividend

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

By analyzing existing cross correlation between Sit Tax Free Income and Sit Dividend Growth, you can compare the effects of market volatilities on Sit Tax and Sit Dividend 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 Tax with a short position of Sit Dividend. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sit Tax and Sit Dividend.

Diversification Opportunities for Sit Tax and Sit Dividend

0.0

Correlation Coefficient

Sit Tax  Sit Dividend

Pay attention - limited upside

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

Pair Corralation between Sit Tax and Sit Dividend

If you would invest  1,398  in Sit Dividend Growth on February 3, 2025 and sell it today you would earn a total of  138.00  from holding Sit Dividend Growth or generate 9.87% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	4.76%
Values	Daily Returns

Sit Tax Free Income  vs.  Sit Dividend Growth

Sit Tax Free

Risk-Adjusted Performance

Very Weak

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

Sit Dividend Growth

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Sit Tax and Sit Dividend

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

The idea behind Sit Tax Free Income and Sit Dividend Growth 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.