Correlation Between Sit Esg and Sit Large
Can any of the company-specific risk be diversified away by investing in both Sit Esg 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 Sit Esg and Sit Large into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sit Esg Growth and Sit Large Cap, you can compare the effects of market volatilities on Sit Esg 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 Sit Esg with a short position of Sit Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sit Esg and Sit Large.
Diversification Opportunities for Sit Esg and Sit Large
Almost no diversification
The 3 months correlation between Sit and Sit is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Sit Esg Growth 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 Sit Esg 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 Esg Growth 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 Sit Esg i.e., Sit Esg and Sit Large go up and down completely randomly.
Pair Corralation between Sit Esg and Sit Large
Assuming the 90 days horizon Sit Esg is expected to generate 1.3 times less return on investment than Sit Large. But when comparing it to its historical volatility, Sit Esg Growth is 1.23 times less risky than Sit Large. It trades about 0.11 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 | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sit Esg Growth vs. Sit Large Cap
Performance |
| Timeline |
| Sit Esg Growth |
| Sit Large Cap |
Sit Esg and Sit Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sit Esg and Sit Large
The main advantage of trading using opposite Sit Esg and Sit Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sit Esg 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.| Sit Esg vs. Precious Metals And | Sit Esg vs. Gamco Global Gold | Sit Esg vs. Goldman Sachs Centrated | Sit Esg vs. Gabelli Gold Fund |
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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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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