Correlation Between Sit International and Sit Small
Can any of the company-specific risk be diversified away by investing in both Sit International and Sit Small 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 Sit Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sit International Growth and Sit Small Cap, you can compare the effects of market volatilities on Sit International and Sit Small 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 Sit Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sit International and Sit Small.
Diversification Opportunities for Sit International and Sit Small
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Sit and Sit is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Sit International Growth and Sit Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sit Small Cap 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 Growth are associated (or correlated) with Sit Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sit Small Cap has no effect on the direction of Sit International i.e., Sit International and Sit Small go up and down completely randomly.
Pair Corralation between Sit International and Sit Small
Assuming the 90 days horizon Sit International Growth is expected to generate 0.74 times more return on investment than Sit Small. However, Sit International Growth is 1.36 times less risky than Sit Small. It trades about 0.11 of its potential returns per unit of risk. Sit Small Cap is currently generating about -0.33 per unit of risk. If you would invest 2,220 in Sit International Growth on November 28, 2024 and sell it today you would earn a total of 41.00 from holding Sit International Growth or generate 1.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sit International Growth vs. Sit Small Cap
Performance |
| Timeline |
| Sit International Growth |
| Sit Small Cap |
Sit International and Sit Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sit International and Sit Small
The main advantage of trading using opposite Sit International and Sit Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sit International position performs unexpectedly, Sit Small 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 Sit Small will offset losses from the drop in Sit Small's long position.| Sit International vs. Barings Active Short | Sit International vs. T Rowe Price | Sit International vs. Catholic Responsible Investments | Sit International vs. Blackrock Global Longshort |
| Sit Small vs. Alpine Ultra Short | Sit Small vs. Siit Ultra Short | Sit Small vs. Fidelity Flex Servative | Sit Small vs. Delaware Investments Ultrashort |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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