Correlation Between Sa Small and Sit Government
Can any of the company-specific risk be diversified away by investing in both Sa Small and Sit Government 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 Sa Small and Sit Government into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sa Small Company and Sit Government Securities, you can compare the effects of market volatilities on Sa Small and Sit Government 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 Sa Small with a short position of Sit Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sa Small and Sit Government.
Diversification Opportunities for Sa Small and Sit Government
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SAUMX and Sit is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Sa Small Company and Sit Government Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sit Government Securities and Sa Small 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 Sa Small Company are associated (or correlated) with Sit Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sit Government Securities has no effect on the direction of Sa Small i.e., Sa Small and Sit Government go up and down completely randomly.
Pair Corralation between Sa Small and Sit Government
Assuming the 90 days horizon Sa Small Company is expected to under-perform the Sit Government. In addition to that, Sa Small is 4.04 times more volatile than Sit Government Securities. It trades about -0.08 of its total potential returns per unit of risk. Sit Government Securities is currently generating about 0.16 per unit of volatility. If you would invest 1,022 in Sit Government Securities on September 12, 2024 and sell it today you would earn a total of 7.00 from holding Sit Government Securities or generate 0.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sa Small Company vs. Sit Government Securities
Performance |
| Timeline |
| Sa Small |
| Sit Government Securities |
Sa Small and Sit Government Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sa Small and Sit Government
The main advantage of trading using opposite Sa Small and Sit Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sa Small position performs unexpectedly, Sit Government 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 Government will offset losses from the drop in Sit Government's long position.| Sa Small vs. Sit Government Securities | Sa Small vs. Intermediate Government Bond | Sa Small vs. Inverse Government Long | Sa Small vs. Long Term Government Fund |
| Sit Government vs. SCOR PK | Sit Government vs. Morningstar Unconstrained Allocation | Sit Government vs. Via Renewables | Sit Government vs. Bondbloxx ETF Trust |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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