Correlation Between Sit Large and Ep Emerging
Can any of the company-specific risk be diversified away by investing in both Sit Large and Ep Emerging 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 Large and Ep Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sit Large Cap and Ep Emerging Markets, you can compare the effects of market volatilities on Sit Large and Ep Emerging 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 Large with a short position of Ep Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sit Large and Ep Emerging.
Diversification Opportunities for Sit Large and Ep Emerging
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sit and EPEIX is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Sit Large Cap and Ep Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ep Emerging Markets and Sit Large 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 Large Cap are associated (or correlated) with Ep Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ep Emerging Markets has no effect on the direction of Sit Large i.e., Sit Large and Ep Emerging go up and down completely randomly.
Pair Corralation between Sit Large and Ep Emerging
Assuming the 90 days horizon Sit Large Cap is expected to generate 1.23 times more return on investment than Ep Emerging. However, Sit Large is 1.23 times more volatile than Ep Emerging Markets. It trades about 0.1 of its potential returns per unit of risk. Ep Emerging Markets is currently generating about 0.01 per unit of risk. If you would invest 5,744 in Sit Large Cap on September 12, 2024 and sell it today you would earn a total of 2,360 from holding Sit Large Cap or generate 41.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sit Large Cap vs. Ep Emerging Markets
Performance |
| Timeline |
| Sit Large Cap |
| Ep Emerging Markets |
Sit Large and Ep Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sit Large and Ep Emerging
The main advantage of trading using opposite Sit Large and Ep Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sit Large position performs unexpectedly, Ep Emerging 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 Ep Emerging will offset losses from the drop in Ep Emerging's long position.| Sit Large vs. Western Asset Municipal | Sit Large vs. Arrow Managed Futures | Sit Large vs. Ab Value Fund | Sit Large vs. Materials Portfolio Fidelity |
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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 Global Correlations module to find global opportunities by holding instruments from different markets.
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