Correlation Between Siit Equity and Sit Small
Can any of the company-specific risk be diversified away by investing in both Siit Equity and Sit 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 Siit Equity and Sit Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Siit Equity Factor and Sit Small Cap, you can compare the effects of market volatilities on Siit Equity and Sit 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 Siit Equity with a short position of Sit Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siit Equity and Sit Small.
Diversification Opportunities for Siit Equity and Sit Small
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Siit and Sit is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Siit Equity Factor and Sit Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sit Small Cap and Siit Equity 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 Equity Factor are associated (or correlated) with Sit Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sit Small Cap has no effect on the direction of Siit Equity i.e., Siit Equity and Sit Small go up and down completely randomly.
Pair Corralation between Siit Equity and Sit Small
Assuming the 90 days horizon Siit Equity is expected to generate 1.14 times less return on investment than Sit Small. But when comparing it to its historical volatility, Siit Equity Factor is 1.61 times less risky than Sit Small. It trades about 0.25 of its potential returns per unit of risk. Sit Small Cap is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 1,697 in Sit Small Cap on November 3, 2024 and sell it today you would earn a total of 67.00 from holding Sit Small Cap or generate 3.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Siit Equity Factor vs. Sit Small Cap
Performance |
| Timeline |
| Siit Equity Factor |
| Sit Small Cap |
Siit Equity and Sit Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Siit Equity and Sit Small
The main advantage of trading using opposite Siit Equity and Sit Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siit Equity position performs unexpectedly, Sit 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 Sit Small will offset losses from the drop in Sit Small's long position.| Siit Equity vs. Columbia Global Technology | Siit Equity vs. Goldman Sachs Technology | Siit Equity vs. Technology Ultrasector Profund | Siit Equity vs. Icon Information Technology |
| Sit Small vs. Financial Industries Fund | Sit Small vs. Prudential Financial Services | Sit Small vs. Goldman Sachs Financial | Sit Small vs. Davis Financial Fund |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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