Correlation Between Smallcap World and Siit Emerging
Can any of the company-specific risk be diversified away by investing in both Smallcap World and Siit Emerging 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 World and Siit Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Smallcap World Fund and Siit Emerging Markets, you can compare the effects of market volatilities on Smallcap World and Siit Emerging 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 World with a short position of Siit Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Smallcap World and Siit Emerging.
Diversification Opportunities for Smallcap World and Siit Emerging
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Smallcap and Siit is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Smallcap World Fund and Siit Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siit Emerging Markets and Smallcap World 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 World Fund are associated (or correlated) with Siit Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siit Emerging Markets has no effect on the direction of Smallcap World i.e., Smallcap World and Siit Emerging go up and down completely randomly.
Pair Corralation between Smallcap World and Siit Emerging
Assuming the 90 days horizon Smallcap World Fund is expected to generate 1.34 times more return on investment than Siit Emerging. However, Smallcap World is 1.34 times more volatile than Siit Emerging Markets. It trades about 0.14 of its potential returns per unit of risk. Siit Emerging Markets is currently generating about -0.13 per unit of risk. If you would invest 6,457 in Smallcap World Fund on August 31, 2024 and sell it today you would earn a total of 171.00 from holding Smallcap World Fund or generate 2.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Smallcap World Fund vs. Siit Emerging Markets
Performance |
| Timeline |
| Smallcap World |
| Siit Emerging Markets |
Smallcap World and Siit Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Smallcap World and Siit Emerging
The main advantage of trading using opposite Smallcap World and Siit Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Smallcap World position performs unexpectedly, Siit Emerging 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 Emerging will offset losses from the drop in Siit Emerging's long position.| Smallcap World vs. Siit Emerging Markets | Smallcap World vs. Artisan Emerging Markets | Smallcap World vs. Eagle Mlp Strategy | Smallcap World vs. Calvert Emerging Markets |
| Siit Emerging vs. Bbh Intermediate Municipal | Siit Emerging vs. Thrivent Income Fund | Siit Emerging vs. T Rowe Price | Siit Emerging vs. Ambrus Core Bond |
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.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum |