Correlation Between Siit Emerging and Edge Midcap
Can any of the company-specific risk be diversified away by investing in both Siit Emerging and Edge Midcap 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 Emerging and Edge Midcap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Siit Emerging Markets and Edge Midcap Fund, you can compare the effects of market volatilities on Siit Emerging and Edge Midcap 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 Emerging with a short position of Edge Midcap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siit Emerging and Edge Midcap.
Diversification Opportunities for Siit Emerging and Edge Midcap
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Siit and Edge is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Siit Emerging Markets and Edge Midcap Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Edge Midcap Fund and Siit 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 Siit Emerging Markets are associated (or correlated) with Edge Midcap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Edge Midcap Fund has no effect on the direction of Siit Emerging i.e., Siit Emerging and Edge Midcap go up and down completely randomly.
Pair Corralation between Siit Emerging and Edge Midcap
Assuming the 90 days horizon Siit Emerging Markets is expected to generate 0.72 times more return on investment than Edge Midcap. However, Siit Emerging Markets is 1.39 times less risky than Edge Midcap. It trades about 0.06 of its potential returns per unit of risk. Edge Midcap Fund is currently generating about 0.03 per unit of risk. If you would invest 803.00 in Siit Emerging Markets on September 3, 2024 and sell it today you would earn a total of 191.00 from holding Siit Emerging Markets or generate 23.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Siit Emerging Markets vs. Edge Midcap Fund
Performance |
| Timeline |
| Siit Emerging Markets |
| Edge Midcap Fund |
Siit Emerging and Edge Midcap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Siit Emerging and Edge Midcap
The main advantage of trading using opposite Siit Emerging and Edge Midcap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siit Emerging position performs unexpectedly, Edge Midcap 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 Edge Midcap will offset losses from the drop in Edge Midcap's long position.| Siit Emerging vs. Barings Emerging Markets | Siit Emerging vs. T Rowe Price | Siit Emerging vs. Transamerica Emerging Markets | Siit Emerging vs. Legg Mason Partners |
| Edge Midcap vs. Massmutual Premier Diversified | Edge Midcap vs. Western Asset Diversified | Edge Midcap vs. Aqr Diversified Arbitrage | Edge Midcap vs. Blackrock Conservative Prprdptfinstttnl |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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