Correlation Between Siit World and Siit Small
Can any of the company-specific risk be diversified away by investing in both Siit World and Siit Small 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 World and Siit Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Siit World Select and Siit Small Mid, you can compare the effects of market volatilities on Siit World and Siit Small 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 World with a short position of Siit Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siit World and Siit Small.
Diversification Opportunities for Siit World and Siit Small
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Siit and Siit is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Siit World Select and Siit Small Mid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siit Small Mid and Siit World 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 World Select are associated (or correlated) with Siit Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siit Small Mid has no effect on the direction of Siit World i.e., Siit World and Siit Small go up and down completely randomly.
Pair Corralation between Siit World and Siit Small
Assuming the 90 days horizon Siit World Select is expected to generate 0.56 times more return on investment than Siit Small. However, Siit World Select is 1.8 times less risky than Siit Small. It trades about 0.12 of its potential returns per unit of risk. Siit Small Mid is currently generating about -0.03 per unit of risk. If you would invest 1,302 in Siit World Select on September 14, 2024 and sell it today you would earn a total of 14.00 from holding Siit World Select or generate 1.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Siit World Select vs. Siit Small Mid
Performance |
| Timeline |
| Siit World Select |
| Siit Small Mid |
Siit World and Siit Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Siit World and Siit Small
The main advantage of trading using opposite Siit World and Siit Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siit World position performs unexpectedly, Siit Small 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 Small will offset losses from the drop in Siit Small's long position.| Siit World vs. Simt Multi Asset Accumulation | Siit World vs. Saat Market Growth | Siit World vs. Simt Real Return | Siit World vs. Simt Small Cap |
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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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