Correlation Between Mid Cap and Sit Large
Can any of the company-specific risk be diversified away by investing in both Mid Cap and Sit Large 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 Mid Cap and Sit Large into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mid Cap Value and Sit Large Cap, you can compare the effects of market volatilities on Mid Cap and Sit Large 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 Mid Cap with a short position of Sit Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mid Cap and Sit Large.
Diversification Opportunities for Mid Cap and Sit Large
Poor diversification
The 3 months correlation between Mid and Sit is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Mid Cap Value and Sit Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sit Large Cap and Mid Cap 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 Mid Cap Value are associated (or correlated) with Sit Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sit Large Cap has no effect on the direction of Mid Cap i.e., Mid Cap and Sit Large go up and down completely randomly.
Pair Corralation between Mid Cap and Sit Large
Assuming the 90 days horizon Mid Cap is expected to generate 2.3 times less return on investment than Sit Large. But when comparing it to its historical volatility, Mid Cap Value is 1.33 times less risky than Sit Large. It trades about 0.07 of its potential returns per unit of risk. Sit Large Cap is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 5,220 in Sit Large Cap on August 30, 2024 and sell it today you would earn a total of 2,646 from holding Sit Large Cap or generate 50.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mid Cap Value vs. Sit Large Cap
Performance |
| Timeline |
| Mid Cap Value |
| Sit Large Cap |
Mid Cap and Sit Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mid Cap and Sit Large
The main advantage of trading using opposite Mid Cap and Sit Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mid Cap position performs unexpectedly, Sit Large 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 Large will offset losses from the drop in Sit Large's long position.| Mid Cap vs. Janus Triton Fund | Mid Cap vs. New World Fund | Mid Cap vs. Fidelity Mid Cap | Mid Cap vs. Mfs Value Fund |
| Sit Large vs. Eventide Healthcare Life | Sit Large vs. Lord Abbett Health | Sit Large vs. Alger Health Sciences | Sit Large vs. Baron Health Care |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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