Correlation Between Sit Mid and Sit Developing
Can any of the company-specific risk be diversified away by investing in both Sit Mid and Sit Developing 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 Mid and Sit Developing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sit Mid Cap and Sit Developing Markets, you can compare the effects of market volatilities on Sit Mid and Sit Developing 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 Mid with a short position of Sit Developing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sit Mid and Sit Developing.
Diversification Opportunities for Sit Mid and Sit Developing
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sit and SIT is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Sit Mid Cap and Sit Developing Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sit Developing Markets and Sit Mid 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 Mid Cap are associated (or correlated) with Sit Developing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sit Developing Markets has no effect on the direction of Sit Mid i.e., Sit Mid and Sit Developing go up and down completely randomly.
Pair Corralation between Sit Mid and Sit Developing
Assuming the 90 days horizon Sit Mid Cap is expected to generate 1.1 times more return on investment than Sit Developing. However, Sit Mid is 1.1 times more volatile than Sit Developing Markets. It trades about 0.21 of its potential returns per unit of risk. Sit Developing Markets is currently generating about -0.14 per unit of risk. If you would invest 2,422 in Sit Mid Cap on August 26, 2024 and sell it today you would earn a total of 120.00 from holding Sit Mid Cap or generate 4.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sit Mid Cap vs. Sit Developing Markets
Performance |
| Timeline |
| Sit Mid Cap |
| Sit Developing Markets |
Sit Mid and Sit Developing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sit Mid and Sit Developing
The main advantage of trading using opposite Sit Mid and Sit Developing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sit Mid position performs unexpectedly, Sit Developing 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 Developing will offset losses from the drop in Sit Developing's long position.| Sit Mid vs. Pace Large Growth | Sit Mid vs. Gmo Equity Allocation | Sit Mid vs. Goldman Sachs Large | Sit Mid vs. Aqr Large Cap |
| Sit Developing vs. Sit Small Cap | Sit Developing vs. Sit Global Dividend | Sit Developing vs. Sit Global Dividend | Sit Developing vs. Sit Small Cap |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope |