Correlation Between Siit Small and Siit Emerging
Can any of the company-specific risk be diversified away by investing in both Siit Small 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 Siit Small and Siit Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Siit Small Cap and Siit Emerging Markets, you can compare the effects of market volatilities on Siit Small 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 Siit Small with a short position of Siit Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siit Small and Siit Emerging.
Diversification Opportunities for Siit Small and Siit Emerging
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Siit and Siit is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Siit Small Cap 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 Siit 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 Siit Small Cap 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 Siit Small i.e., Siit Small and Siit Emerging go up and down completely randomly.
Pair Corralation between Siit Small and Siit Emerging
Assuming the 90 days horizon Siit Small Cap is expected to generate 2.87 times more return on investment than Siit Emerging. However, Siit Small is 2.87 times more volatile than Siit Emerging Markets. It trades about 0.05 of its potential returns per unit of risk. Siit Emerging Markets is currently generating about 0.09 per unit of risk. If you would invest 1,021 in Siit Small Cap on August 26, 2024 and sell it today you would earn a total of 275.00 from holding Siit Small Cap or generate 26.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Siit Small Cap vs. Siit Emerging Markets
Performance |
| Timeline |
| Siit Small Cap |
| Siit Emerging Markets |
Siit Small and Siit Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Siit Small and Siit Emerging
The main advantage of trading using opposite Siit Small and Siit Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siit Small 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.| Siit Small vs. Simt Multi Asset Accumulation | Siit Small vs. Saat Market Growth | Siit Small vs. Simt Real Return | Siit Small vs. Simt Small Cap |
| Siit Emerging vs. Simt Multi Asset Accumulation | Siit Emerging vs. Saat Market Growth | Siit Emerging vs. Simt Real Return | Siit Emerging vs. Simt Small Cap |
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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