Correlation Between Smallcap Growth and Siit World
Can any of the company-specific risk be diversified away by investing in both Smallcap Growth and Siit World 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 Smallcap Growth and Siit World into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Smallcap Growth Fund and Siit World Equity, you can compare the effects of market volatilities on Smallcap Growth and Siit World 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 Smallcap Growth with a short position of Siit World. Check out your portfolio center. Please also check ongoing floating volatility patterns of Smallcap Growth and Siit World.
Diversification Opportunities for Smallcap Growth and Siit World
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Smallcap and Siit is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Smallcap Growth Fund and Siit World Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siit World Equity and Smallcap Growth 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 Smallcap Growth Fund are associated (or correlated) with Siit World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siit World Equity has no effect on the direction of Smallcap Growth i.e., Smallcap Growth and Siit World go up and down completely randomly.
Pair Corralation between Smallcap Growth and Siit World
Assuming the 90 days horizon Smallcap Growth Fund is expected to generate 1.72 times more return on investment than Siit World. However, Smallcap Growth is 1.72 times more volatile than Siit World Equity. It trades about 0.06 of its potential returns per unit of risk. Siit World Equity is currently generating about 0.06 per unit of risk. If you would invest 1,375 in Smallcap Growth Fund on August 26, 2024 and sell it today you would earn a total of 332.00 from holding Smallcap Growth Fund or generate 24.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Smallcap Growth Fund vs. Siit World Equity
Performance |
| Timeline |
| Smallcap Growth |
| Siit World Equity |
Smallcap Growth and Siit World Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Smallcap Growth and Siit World
The main advantage of trading using opposite Smallcap Growth and Siit World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Smallcap Growth position performs unexpectedly, Siit World 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 Siit World will offset losses from the drop in Siit World's long position.| Smallcap Growth vs. Small Cap Value Series | Smallcap Growth vs. Pace Smallmedium Value | Smallcap Growth vs. Heartland Value Plus | Smallcap Growth vs. Palm Valley Capital |
| Siit World vs. Victory Rs Growth | Siit World vs. Smallcap Growth Fund | Siit World vs. L Abbett Growth | Siit World vs. T Rowe Price |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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