Correlation Between Simt Small and Sit International
Can any of the company-specific risk be diversified away by investing in both Simt Small and Sit International 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 Simt Small and Sit International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Simt Small Cap and Sit International Equity, you can compare the effects of market volatilities on Simt Small and Sit International 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 Simt Small with a short position of Sit International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simt Small and Sit International.
Diversification Opportunities for Simt Small and Sit International
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Simt and Sit is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Simt Small Cap and Sit International Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sit International Equity and Simt Small 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 Simt Small Cap are associated (or correlated) with Sit International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sit International Equity has no effect on the direction of Simt Small i.e., Simt Small and Sit International go up and down completely randomly.
Pair Corralation between Simt Small and Sit International
Assuming the 90 days horizon Simt Small Cap is expected to generate 1.35 times more return on investment than Sit International. However, Simt Small is 1.35 times more volatile than Sit International Equity. It trades about 0.0 of its potential returns per unit of risk. Sit International Equity is currently generating about -0.09 per unit of risk. If you would invest 3,698 in Simt Small Cap on October 31, 2024 and sell it today you would lose (45.00) from holding Simt Small Cap or give up 1.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Simt Small Cap vs. Sit International Equity
Performance |
| Timeline |
| Simt Small Cap |
| Sit International Equity |
Simt Small and Sit International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Simt Small and Sit International
The main advantage of trading using opposite Simt Small and Sit International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simt Small position performs unexpectedly, Sit International 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 International will offset losses from the drop in Sit International's long position.| Simt Small vs. Western Asset Adjustable | Simt Small vs. Qs Growth Fund | Simt Small vs. T Rowe Price | Simt Small vs. Credit Suisse Floating |
| Sit International vs. Sit Emerging Markets | Sit International vs. Simt E Fixed | Sit International vs. Simt Multi Asset Income | Sit International vs. Simt Global Managed |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency |