Correlation Between Sit International and Siit Large
Can any of the company-specific risk be diversified away by investing in both Sit International and Siit Large 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 Sit International and Siit Large into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sit International Equity and Siit Large Cap, you can compare the effects of market volatilities on Sit International and Siit Large 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 Sit International with a short position of Siit Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sit International and Siit Large.
Diversification Opportunities for Sit International and Siit Large
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sit and Siit is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Sit International Equity and Siit Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siit Large Cap and Sit International 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 Sit International Equity are associated (or correlated) with Siit Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siit Large Cap has no effect on the direction of Sit International i.e., Sit International and Siit Large go up and down completely randomly.
Pair Corralation between Sit International and Siit Large
Assuming the 90 days horizon Sit International Equity is expected to generate 1.05 times more return on investment than Siit Large. However, Sit International is 1.05 times more volatile than Siit Large Cap. It trades about 0.25 of its potential returns per unit of risk. Siit Large Cap is currently generating about -0.02 per unit of risk. If you would invest 1,159 in Sit International Equity on November 27, 2024 and sell it today you would earn a total of 42.00 from holding Sit International Equity or generate 3.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sit International Equity vs. Siit Large Cap
Performance |
| Timeline |
| Sit International Equity |
| Siit Large Cap |
Sit International and Siit Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sit International and Siit Large
The main advantage of trading using opposite Sit International and Siit Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sit International position performs unexpectedly, Siit Large 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 Large will offset losses from the drop in Siit Large's long position.| Sit International vs. Sit Emerging Markets | Sit International vs. Simt E Fixed | Sit International vs. Simt Multi Asset Income | Sit International vs. Simt Global Managed |
| Siit Large vs. Siit Dynamic Asset | Siit Large vs. Columbia Large Cap | Siit Large vs. Janus Growth And | Siit Large vs. Nationwide Sp 500 |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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