Correlation Between Emerging Markets and Sit Large
Can any of the company-specific risk be diversified away by investing in both Emerging Markets 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 Emerging Markets and Sit Large into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Emerging Markets and Sit Large Cap, you can compare the effects of market volatilities on Emerging Markets 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 Emerging Markets with a short position of Sit Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emerging Markets and Sit Large.
Diversification Opportunities for Emerging Markets and Sit Large
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Emerging and Sit is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding The Emerging Markets 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 Emerging Markets 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 The Emerging Markets 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 Emerging Markets i.e., Emerging Markets and Sit Large go up and down completely randomly.
Pair Corralation between Emerging Markets and Sit Large
Assuming the 90 days horizon Emerging Markets is expected to generate 3.07 times less return on investment than Sit Large. But when comparing it to its historical volatility, The Emerging Markets is 1.08 times less risky than Sit Large. It trades about 0.04 of its potential returns per unit of risk. Sit Large Cap is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 5,744 in Sit Large Cap on September 12, 2024 and sell it today you would earn a total of 2,360 from holding Sit Large Cap or generate 41.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Emerging Markets vs. Sit Large Cap
Performance |
| Timeline |
| Emerging Markets |
| Sit Large Cap |
Emerging Markets and Sit Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Emerging Markets and Sit Large
The main advantage of trading using opposite Emerging Markets and Sit Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emerging Markets 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.| Emerging Markets vs. Ab Global Risk | Emerging Markets vs. Jhancock Global Equity | Emerging Markets vs. Kinetics Global Fund | Emerging Markets vs. Ab Global Real |
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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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