Correlation Between Sit International and Simt Tax-managed
Can any of the company-specific risk be diversified away by investing in both Sit International and Simt Tax-managed 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 Tax-managed 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 Tax Managed Smallmid, you can compare the effects of market volatilities on Sit International and Simt Tax-managed 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 Tax-managed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sit International and Simt Tax-managed.
Diversification Opportunities for Sit International and Simt Tax-managed
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sit and Simt is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Sit International Equity and Simt Tax Managed Smallmid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simt Tax Managed 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 Tax-managed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simt Tax Managed has no effect on the direction of Sit International i.e., Sit International and Simt Tax-managed go up and down completely randomly.
Pair Corralation between Sit International and Simt Tax-managed
Assuming the 90 days horizon Sit International Equity is expected to under-perform the Simt Tax-managed. But the mutual fund apears to be less risky and, when comparing its historical volatility, Sit International Equity is 1.76 times less risky than Simt Tax-managed. The mutual fund trades about -0.09 of its potential returns per unit of risk. The Simt Tax Managed Smallmid is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 2,747 in Simt Tax Managed Smallmid on August 29, 2024 and sell it today you would earn a total of 278.00 from holding Simt Tax Managed Smallmid or generate 10.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.44% |
| Values | Daily Returns |
Sit International Equity vs. Simt Tax Managed Smallmid
Performance |
| Timeline |
| Sit International Equity |
| Simt Tax Managed |
Sit International and Simt Tax-managed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sit International and Simt Tax-managed
The main advantage of trading using opposite Sit International and Simt Tax-managed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sit International position performs unexpectedly, Simt Tax-managed 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 Tax-managed will offset losses from the drop in Simt Tax-managed's long position.| Sit International vs. Queens Road Small | Sit International vs. Hennessy Nerstone Mid | Sit International vs. Heartland Value Plus | Sit International vs. Fpa Queens Road |
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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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