Correlation Between Sit International and Simt Sp
Can any of the company-specific risk be diversified away by investing in both Sit International and Simt Sp 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 Sp 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 Sp 500, you can compare the effects of market volatilities on Sit International and Simt Sp 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 Sp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sit International and Simt Sp.
Diversification Opportunities for Sit International and Simt Sp
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sit and Simt is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Sit International Equity and Simt Sp 500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simt Sp 500 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 Sp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simt Sp 500 has no effect on the direction of Sit International i.e., Sit International and Simt Sp go up and down completely randomly.
Pair Corralation between Sit International and Simt Sp
Assuming the 90 days horizon Sit International Equity is expected to under-perform the Simt Sp. But the mutual fund apears to be less risky and, when comparing its historical volatility, Sit International Equity is 1.18 times less risky than Simt Sp. The mutual fund trades about -0.08 of its potential returns per unit of risk. The Simt Sp 500 is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 10,374 in Simt Sp 500 on August 31, 2024 and sell it today you would earn a total of 403.00 from holding Simt Sp 500 or generate 3.88% 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 Sp 500
Performance |
| Timeline |
| Sit International Equity |
| Simt Sp 500 |
Sit International and Simt Sp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sit International and Simt Sp
The main advantage of trading using opposite Sit International and Simt Sp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sit International position performs unexpectedly, Simt Sp 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 Sp will offset losses from the drop in Simt Sp's long position.| Sit International vs. Calvert Global Energy | Sit International vs. Short Oil Gas | Sit International vs. Icon Natural Resources | Sit International vs. World Energy Fund |
| Simt Sp vs. Simt Small Cap | Simt Sp vs. Simt Small Cap | Simt Sp vs. Simt Large Cap | Simt Sp vs. Sit International Equity |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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