Correlation Between Simt Us and Sit Emerging
Can any of the company-specific risk be diversified away by investing in both Simt Us 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 Us 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 Managed Volatility and Sit Emerging Markets, you can compare the effects of market volatilities on Simt Us 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 Us with a short position of Sit Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simt Us and Sit Emerging.
Diversification Opportunities for Simt Us and Sit Emerging
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Simt and Sit is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Simt Managed Volatility 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 Us 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 Managed Volatility 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 Us i.e., Simt Us and Sit Emerging go up and down completely randomly.
Pair Corralation between Simt Us and Sit Emerging
Assuming the 90 days horizon Simt Managed Volatility is expected to generate 0.61 times more return on investment than Sit Emerging. However, Simt Managed Volatility is 1.64 times less risky than Sit Emerging. It trades about 0.32 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 1,395 in Simt Managed Volatility on November 9, 2024 and sell it today you would earn a total of 52.00 from holding Simt Managed Volatility or generate 3.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Simt Managed Volatility vs. Sit Emerging Markets
Performance |
| Timeline |
| Simt Managed Volatility |
| Sit Emerging Markets |
Simt Us and Sit Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Simt Us and Sit Emerging
The main advantage of trading using opposite Simt Us and Sit Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simt Us 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 Us vs. Victory Trivalent International | Simt Us vs. Mfs Research Fund | Simt Us vs. The Hartford Midcap | Simt Us vs. Mfs International Growth |
| 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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