Correlation Between Siit Small and Saat Market

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Can any of the company-specific risk be diversified away by investing in both Siit Small and Saat Market 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 Saat Market 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 Saat Market Growth, you can compare the effects of market volatilities on Siit Small and Saat Market 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 Saat Market. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siit Small and Saat Market.

Diversification Opportunities for Siit Small and Saat Market

SiitSAATDiversified AwaySiitSAATDiversified Away100%
0.75
  Correlation Coefficient

Poor diversification

The 3 months correlation between Siit and SAAT is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Siit Small Mid and Saat Market Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saat Market Growth 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 Saat Market. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saat Market Growth has no effect on the direction of Siit Small i.e., Siit Small and Saat Market go up and down completely randomly.

Pair Corralation between Siit Small and Saat Market

Assuming the 90 days horizon Siit Small is expected to generate 1.4 times less return on investment than Saat Market. In addition to that, Siit Small is 2.29 times more volatile than Saat Market Growth. It trades about 0.02 of its total potential returns per unit of risk. Saat Market Growth is currently generating about 0.08 per unit of volatility. If you would invest  1,121  in Saat Market Growth on November 26, 2024 and sell it today you would earn a total of  123.00  from holding Saat Market Growth or generate 10.97% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Siit Small Mid  vs.  Saat Market Growth

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -10-50
JavaScript chart by amCharts 3.21.15SSMAX SMGSX
       Timeline  
Siit Small Mid 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Siit Small Mid has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb1010.51111.5
Saat Market Growth 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Saat Market Growth has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Saat Market is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb1212.112.212.312.412.512.6

Siit Small and Saat Market Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-2.38-1.82-1.26-0.7-0.140.370.931.492.05 0.20.40.60.81.01.2
JavaScript chart by amCharts 3.21.15SSMAX SMGSX
       Returns  

Pair Trading with Siit Small and Saat Market

The main advantage of trading using opposite Siit Small and Saat Market positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siit Small position performs unexpectedly, Saat Market 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 Saat Market will offset losses from the drop in Saat Market's long position.
The idea behind Siit Small Mid and Saat Market Growth pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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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