Correlation Between Pace High and Siit Small
Can any of the company-specific risk be diversified away by investing in both Pace High and Siit 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 Pace High and Siit Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pace High Yield and Siit Small Cap, you can compare the effects of market volatilities on Pace High and Siit 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 Pace High with a short position of Siit Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pace High and Siit Small.
Diversification Opportunities for Pace High and Siit Small
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Pace and Siit is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Pace High Yield and Siit Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siit Small Cap and Pace High 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 Pace High Yield are associated (or correlated) with Siit Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siit Small Cap has no effect on the direction of Pace High i.e., Pace High and Siit Small go up and down completely randomly.
Pair Corralation between Pace High and Siit Small
Assuming the 90 days horizon Pace High is expected to generate 2.95 times less return on investment than Siit Small. But when comparing it to its historical volatility, Pace High Yield is 9.1 times less risky than Siit Small. It trades about 0.33 of its potential returns per unit of risk. Siit Small Cap is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,115 in Siit Small Cap on September 1, 2024 and sell it today you would earn a total of 194.00 from holding Siit Small Cap or generate 17.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.21% |
| Values | Daily Returns |
Pace High Yield vs. Siit Small Cap
Performance |
| Timeline |
| Pace High Yield |
| Siit Small Cap |
Pace High and Siit Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pace High and Siit Small
The main advantage of trading using opposite Pace High and Siit Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pace High position performs unexpectedly, Siit 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 Siit Small will offset losses from the drop in Siit Small's long position.| Pace High vs. Aqr Sustainable Long Short | Pace High vs. Quantitative Longshort Equity | Pace High vs. Ab Select Longshort | Pace High vs. Calvert Short Duration |
| Siit Small vs. Pace High Yield | Siit Small vs. Valic Company I | Siit Small vs. Siit High Yield | Siit Small vs. American Century High |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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