Correlation Between Sit U and Sit Mid
Can any of the company-specific risk be diversified away by investing in both Sit U and Sit Mid 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 U and Sit Mid into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sit U S and Sit Mid Cap, you can compare the effects of market volatilities on Sit U and Sit Mid 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 U with a short position of Sit Mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sit U and Sit Mid.
Diversification Opportunities for Sit U and Sit Mid
Pay attention - limited upside
The 3 months correlation between Sit and SIT is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Sit U S and Sit Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sit Mid Cap and Sit U 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 U S are associated (or correlated) with Sit Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sit Mid Cap has no effect on the direction of Sit U i.e., Sit U and Sit Mid go up and down completely randomly.
Pair Corralation between Sit U and Sit Mid
Assuming the 90 days horizon Sit U is expected to generate 3.73 times less return on investment than Sit Mid. But when comparing it to its historical volatility, Sit U S is 3.7 times less risky than Sit Mid. It trades about 0.08 of its potential returns per unit of risk. Sit Mid Cap is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 2,014 in Sit Mid Cap on August 29, 2024 and sell it today you would earn a total of 537.00 from holding Sit Mid Cap or generate 26.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sit U S vs. Sit Mid Cap
Performance |
| Timeline |
| Sit U S |
| Sit Mid Cap |
Sit U and Sit Mid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sit U and Sit Mid
The main advantage of trading using opposite Sit U and Sit Mid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sit U position performs unexpectedly, Sit Mid 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 Mid will offset losses from the drop in Sit Mid's long position.| Sit U vs. Tcw Total Return | Sit U vs. Ridgeworth Seix Government | Sit U vs. Short Duration Income | Sit U vs. Thompson Bond Fund |
| Sit Mid vs. Live Oak Health | Sit Mid vs. Hartford Healthcare Hls | Sit Mid vs. Highland Longshort Healthcare | Sit Mid vs. Alphacentric Lifesci Healthcare |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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