Correlation Between Sit Global and Sit Emerging
Can any of the company-specific risk be diversified away by investing in both Sit Global and Sit Emerging 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 Global and Sit Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sit Global Dividend and Sit Emerging Markets, you can compare the effects of market volatilities on Sit Global and Sit Emerging 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 Global with a short position of Sit Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sit Global and Sit Emerging.
Diversification Opportunities for Sit Global and Sit Emerging
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sit and Sit is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Sit Global Dividend and Sit Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sit Emerging Markets and Sit 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 Sit Global Dividend are associated (or correlated) with Sit Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sit Emerging Markets has no effect on the direction of Sit Global i.e., Sit Global and Sit Emerging go up and down completely randomly.
Pair Corralation between Sit Global and Sit Emerging
Assuming the 90 days horizon Sit Global Dividend is expected to generate 0.86 times more return on investment than Sit Emerging. However, Sit Global Dividend is 1.17 times less risky than Sit Emerging. It trades about 0.09 of its potential returns per unit of risk. Sit Emerging Markets is currently generating about 0.04 per unit of risk. If you would invest 2,063 in Sit Global Dividend on September 3, 2024 and sell it today you would earn a total of 792.00 from holding Sit Global Dividend or generate 38.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sit Global Dividend vs. Sit Emerging Markets
Performance |
| Timeline |
| Sit Global Dividend |
| Sit Emerging Markets |
Sit Global and Sit Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sit Global and Sit Emerging
The main advantage of trading using opposite Sit Global and Sit Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sit Global position performs unexpectedly, Sit Emerging 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 Emerging will offset losses from the drop in Sit Emerging's long position.| Sit Global vs. American Funds Capital | Sit Global vs. American Funds Capital | Sit Global vs. Capital World Growth | Sit Global vs. Capital World Growth |
| Sit Emerging vs. Sit Emerging Markets | Sit Emerging vs. Sit Small Cap | Sit Emerging vs. Sit Global Dividend | Sit Emerging vs. Sit Global Dividend |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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