Correlation Between Sit Emerging and Stet Intermediate
Can any of the company-specific risk be diversified away by investing in both Sit Emerging and Stet Intermediate 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 Emerging and Stet Intermediate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sit Emerging Markets and Stet Intermediate Term, you can compare the effects of market volatilities on Sit Emerging and Stet Intermediate 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 Emerging with a short position of Stet Intermediate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sit Emerging and Stet Intermediate.
Diversification Opportunities for Sit Emerging and Stet Intermediate
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Sit and Stet is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Sit Emerging Markets and Stet Intermediate Term in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stet Intermediate Term and Sit Emerging 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 Emerging Markets are associated (or correlated) with Stet Intermediate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stet Intermediate Term has no effect on the direction of Sit Emerging i.e., Sit Emerging and Stet Intermediate go up and down completely randomly.
Pair Corralation between Sit Emerging and Stet Intermediate
Assuming the 90 days horizon Sit Emerging Markets is expected to under-perform the Stet Intermediate. In addition to that, Sit Emerging is 2.99 times more volatile than Stet Intermediate Term. It trades about -0.22 of its total potential returns per unit of risk. Stet Intermediate Term is currently generating about 0.17 per unit of volatility. If you would invest 1,107 in Stet Intermediate Term on August 29, 2024 and sell it today you would earn a total of 11.00 from holding Stet Intermediate Term or generate 0.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sit Emerging Markets vs. Stet Intermediate Term
Performance |
| Timeline |
| Sit Emerging Markets |
| Stet Intermediate Term |
Sit Emerging and Stet Intermediate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sit Emerging and Stet Intermediate
The main advantage of trading using opposite Sit Emerging and Stet Intermediate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sit Emerging position performs unexpectedly, Stet Intermediate 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 Stet Intermediate will offset losses from the drop in Stet Intermediate's long position.| Sit Emerging vs. Vanguard Emerging Markets | Sit Emerging vs. Vanguard Emerging Markets | Sit Emerging vs. HUMANA INC | Sit Emerging vs. Aquagold International |
| Stet Intermediate vs. Sit International Equity | Stet Intermediate vs. Intermediate Taxamt Free Fund | Stet Intermediate vs. Goldman Sachs Short | Stet Intermediate vs. Simt High Yield |
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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