Correlation Between Simt Tax-managed and Sit Emerging
Can any of the company-specific risk be diversified away by investing in both Simt Tax-managed and Sit 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 Simt Tax-managed and Sit Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Simt Tax Managed Smallmid and Sit Emerging Markets, you can compare the effects of market volatilities on Simt Tax-managed and Sit 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 Simt Tax-managed with a short position of Sit Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simt Tax-managed and Sit Emerging.
Diversification Opportunities for Simt Tax-managed and Sit Emerging
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Simt and Sit is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Simt Tax Managed Smallmid and Sit Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sit Emerging Markets and Simt Tax-managed 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 Tax Managed Smallmid are associated (or correlated) with Sit Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sit Emerging Markets has no effect on the direction of Simt Tax-managed i.e., Simt Tax-managed and Sit Emerging go up and down completely randomly.
Pair Corralation between Simt Tax-managed and Sit Emerging
Assuming the 90 days horizon Simt Tax Managed Smallmid is expected to generate 1.02 times more return on investment than Sit Emerging. However, Simt Tax-managed is 1.02 times more volatile than Sit Emerging Markets. It trades about 0.2 of its potential returns per unit of risk. Sit Emerging Markets is currently generating about 0.18 per unit of risk. If you would invest 2,299 in Simt Tax Managed Smallmid on November 9, 2024 and sell it today you would earn a total of 87.00 from holding Simt Tax Managed Smallmid or generate 3.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Simt Tax Managed Smallmid vs. Sit Emerging Markets
Performance |
| Timeline |
| Simt Tax Managed |
| Sit Emerging Markets |
Simt Tax-managed and Sit Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Simt Tax-managed and Sit Emerging
The main advantage of trading using opposite Simt Tax-managed and Sit Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simt Tax-managed position performs unexpectedly, Sit 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 Sit Emerging will offset losses from the drop in Sit Emerging's long position.| Simt Tax-managed vs. Growth Allocation Fund | Simt Tax-managed vs. Upright Assets Allocation | Simt Tax-managed vs. Oppenheimer Global Allocation | Simt Tax-managed vs. Gmo International Developed |
| Sit Emerging vs. United Kingdom Small | Sit Emerging vs. Artisan Small Cap | Sit Emerging vs. Smallcap Fund Fka | Sit Emerging vs. Df Dent Small |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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