Correlation Between Sit Emerging and Emerging Markets
Can any of the company-specific risk be diversified away by investing in both Sit Emerging and Emerging Markets 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 Emerging Markets 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 Emerging Markets Bond, you can compare the effects of market volatilities on Sit Emerging and Emerging Markets 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 Emerging Markets. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sit Emerging and Emerging Markets.
Diversification Opportunities for Sit Emerging and Emerging Markets
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sit and Emerging is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Sit Emerging Markets and Emerging Markets Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emerging Markets Bond 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 Emerging Markets. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emerging Markets Bond has no effect on the direction of Sit Emerging i.e., Sit Emerging and Emerging Markets go up and down completely randomly.
Pair Corralation between Sit Emerging and Emerging Markets
Assuming the 90 days horizon Sit Emerging Markets is expected to generate 1.44 times more return on investment than Emerging Markets. However, Sit Emerging is 1.44 times more volatile than Emerging Markets Bond. It trades about 0.3 of its potential returns per unit of risk. Emerging Markets Bond is currently generating about 0.16 per unit of risk. If you would invest 846.00 in Sit Emerging Markets on November 3, 2024 and sell it today you would earn a total of 21.00 from holding Sit Emerging Markets or generate 2.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sit Emerging Markets vs. Emerging Markets Bond
Performance |
| Timeline |
| Sit Emerging Markets |
| Emerging Markets Bond |
Sit Emerging and Emerging Markets Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sit Emerging and Emerging Markets
The main advantage of trading using opposite Sit Emerging and Emerging Markets positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sit Emerging position performs unexpectedly, Emerging Markets 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 Emerging Markets will offset losses from the drop in Emerging Markets' long position.| Sit Emerging vs. Touchstone Large Cap | Sit Emerging vs. Growth Portfolio Class | Sit Emerging vs. Tfa Alphagen Growth | Sit Emerging vs. Barings Global Floating |
| Emerging Markets vs. Mirova Global Green | Emerging Markets vs. Chartwell Short Duration | Emerging Markets vs. Multisector Bond Sma | Emerging Markets vs. Versatile Bond Portfolio |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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