Correlation Between Midcap Fund and Sit Small
Can any of the company-specific risk be diversified away by investing in both Midcap Fund and Sit Small 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 Midcap Fund and Sit Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Midcap Fund Institutional and Sit Small Cap, you can compare the effects of market volatilities on Midcap Fund and Sit Small 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 Midcap Fund with a short position of Sit Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Midcap Fund and Sit Small.
Diversification Opportunities for Midcap Fund and Sit Small
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Midcap and Sit is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Midcap Fund Institutional and Sit Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sit Small Cap and Midcap Fund 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 Midcap Fund Institutional are associated (or correlated) with Sit Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sit Small Cap has no effect on the direction of Midcap Fund i.e., Midcap Fund and Sit Small go up and down completely randomly.
Pair Corralation between Midcap Fund and Sit Small
Assuming the 90 days horizon Midcap Fund Institutional is expected to generate 0.76 times more return on investment than Sit Small. However, Midcap Fund Institutional is 1.31 times less risky than Sit Small. It trades about 0.28 of its potential returns per unit of risk. Sit Small Cap is currently generating about 0.15 per unit of risk. If you would invest 4,601 in Midcap Fund Institutional on August 26, 2024 and sell it today you would earn a total of 286.00 from holding Midcap Fund Institutional or generate 6.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Midcap Fund Institutional vs. Sit Small Cap
Performance |
| Timeline |
| Midcap Fund Institutional |
| Sit Small Cap |
Midcap Fund and Sit Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Midcap Fund and Sit Small
The main advantage of trading using opposite Midcap Fund and Sit Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Midcap Fund position performs unexpectedly, Sit Small 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 Small will offset losses from the drop in Sit Small's long position.| Midcap Fund vs. Knights Of Umbus | Midcap Fund vs. Massmutual Select T | Midcap Fund vs. Guggenheim Rbp Large Cap | Midcap Fund vs. Fisher Large Cap |
| Sit Small vs. Vy Blackrock Inflation | Sit Small vs. Arrow Managed Futures | Sit Small vs. Short Duration Inflation | Sit Small vs. Ab Bond Inflation |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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