Correlation Between Sit International and Saat Market
Can any of the company-specific risk be diversified away by investing in both Sit International and Saat Market 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 Saat Market 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 Saat Market Growth, you can compare the effects of market volatilities on Sit International and Saat Market 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 Saat Market. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sit International and Saat Market.
Diversification Opportunities for Sit International and Saat Market
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Sit and Saat is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Sit International Equity and Saat Market Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saat Market Growth 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 Saat Market. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saat Market Growth has no effect on the direction of Sit International i.e., Sit International and Saat Market go up and down completely randomly.
Pair Corralation between Sit International and Saat Market
Assuming the 90 days horizon Sit International is expected to generate 8.04 times less return on investment than Saat Market. In addition to that, Sit International is 1.71 times more volatile than Saat Market Growth. It trades about 0.01 of its total potential returns per unit of risk. Saat Market Growth is currently generating about 0.12 per unit of volatility. If you would invest 1,217 in Saat Market Growth on September 1, 2024 and sell it today you would earn a total of 87.00 from holding Saat Market Growth or generate 7.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sit International Equity vs. Saat Market Growth
Performance |
| Timeline |
| Sit International Equity |
| Saat Market Growth |
Sit International and Saat Market Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sit International and Saat Market
The main advantage of trading using opposite Sit International and Saat Market positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sit International position performs unexpectedly, Saat Market 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 Saat Market will offset losses from the drop in Saat Market'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 |
| Saat Market vs. Simt Multi Asset Accumulation | Saat Market vs. Simt Real Return | Saat Market vs. Simt Small Cap | Saat Market vs. Siit Screened World |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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