Correlation Between Siit Small and Siit Large
Can any of the company-specific risk be diversified away by investing in both Siit Small and Siit Large 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 Siit Small and Siit Large into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Siit Small Mid and Siit Large Cap, you can compare the effects of market volatilities on Siit Small and Siit Large 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 Siit Small with a short position of Siit Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siit Small and Siit Large.
Diversification Opportunities for Siit Small and Siit Large
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Siit and Siit is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Siit Small Mid and Siit Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siit Large Cap and Siit 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 Siit Small Mid are associated (or correlated) with Siit Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siit Large Cap has no effect on the direction of Siit Small i.e., Siit Small and Siit Large go up and down completely randomly.
Pair Corralation between Siit Small and Siit Large
Assuming the 90 days horizon Siit Small is expected to generate 1.14 times less return on investment than Siit Large. But when comparing it to its historical volatility, Siit Small Mid is 1.04 times less risky than Siit Large. It trades about 0.03 of its potential returns per unit of risk. Siit Large Cap is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 16,926 in Siit Large Cap on November 27, 2024 and sell it today you would earn a total of 3,141 from holding Siit Large Cap or generate 18.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Siit Small Mid vs. Siit Large Cap
Performance |
| Timeline |
| Siit Small Mid |
| Siit Large Cap |
Siit Small and Siit Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Siit Small and Siit Large
The main advantage of trading using opposite Siit Small and Siit Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siit Small position performs unexpectedly, Siit Large 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 Siit Large will offset losses from the drop in Siit Large's long position.| Siit Small vs. T Rowe Price | Siit Small vs. T Rowe Price | Siit Small vs. Channing Intrinsic Value | Siit Small vs. Allianzgi Small Cap Blend |
| Siit Large vs. Siit Dynamic Asset | Siit Large vs. Columbia Large Cap | Siit Large vs. Janus Growth And | Siit Large vs. Nationwide Sp 500 |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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