Correlation Between Sit Government and Sa Small
Can any of the company-specific risk be diversified away by investing in both Sit Government and Sa 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 Government and Sa Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sit Government Securities and Sa Small Company, you can compare the effects of market volatilities on Sit Government and Sa 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 Government with a short position of Sa Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sit Government and Sa Small.
Diversification Opportunities for Sit Government and Sa Small
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sit and SAUMX is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Sit Government Securities and Sa Small Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sa Small and Sit Government 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 Government Securities are associated (or correlated) with Sa Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sa Small has no effect on the direction of Sit Government i.e., Sit Government and Sa Small go up and down completely randomly.
Pair Corralation between Sit Government and Sa Small
Assuming the 90 days horizon Sit Government Securities is expected to generate 0.25 times more return on investment than Sa Small. However, Sit Government Securities is 4.04 times less risky than Sa Small. It trades about 0.16 of its potential returns per unit of risk. Sa Small Company is currently generating about -0.08 per unit of risk. If you would invest 1,022 in Sit Government Securities on September 12, 2024 and sell it today you would earn a total of 7.00 from holding Sit Government Securities or generate 0.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sit Government Securities vs. Sa Small Company
Performance |
| Timeline |
| Sit Government Securities |
| Sa Small |
Sit Government and Sa Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sit Government and Sa Small
The main advantage of trading using opposite Sit Government and Sa Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sit Government position performs unexpectedly, Sa 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 Sa Small will offset losses from the drop in Sa Small's long position.| Sit Government vs. SCOR PK | Sit Government vs. Morningstar Unconstrained Allocation | Sit Government vs. Via Renewables | Sit Government vs. Bondbloxx ETF Trust |
| Sa Small vs. Sit Government Securities | Sa Small vs. Intermediate Government Bond | Sa Small vs. Inverse Government Long | Sa Small vs. Long Term Government Fund |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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