Correlation Between Sit International and Simt Small
Can any of the company-specific risk be diversified away by investing in both Sit International and Simt 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 Sit International and Simt Small 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 Simt Small Cap, you can compare the effects of market volatilities on Sit International and Simt 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 Sit International with a short position of Simt Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sit International and Simt Small.
Diversification Opportunities for Sit International and Simt Small
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sit and Simt is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Sit International Equity and Simt Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simt Small 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 Simt Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simt Small Cap has no effect on the direction of Sit International i.e., Sit International and Simt Small go up and down completely randomly.
Pair Corralation between Sit International and Simt Small
Assuming the 90 days horizon Sit International is expected to generate 1.69 times less return on investment than Simt Small. But when comparing it to its historical volatility, Sit International Equity is 1.61 times less risky than Simt Small. It trades about 0.05 of its potential returns per unit of risk. Simt Small Cap is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2,356 in Simt Small Cap on August 26, 2024 and sell it today you would earn a total of 494.00 from holding Simt Small Cap or generate 20.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sit International Equity vs. Simt Small Cap
Performance |
| Timeline |
| Sit International Equity |
| Simt Small Cap |
Sit International and Simt Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sit International and Simt Small
The main advantage of trading using opposite Sit International and Simt Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sit International position performs unexpectedly, Simt 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 Simt Small will offset losses from the drop in Simt Small's long position.| Sit International vs. Simt Multi Asset Accumulation | Sit International vs. Saat Market Growth | Sit International vs. Simt Real Return | Sit International vs. Simt Small Cap |
| Simt Small vs. Aim Investment Secs | Simt Small vs. T Rowe Price | Simt Small vs. Usaa Mutual Funds | Simt Small vs. Dreyfus Institutional Reserves |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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