Correlation Between Equity Growth and Sit Quality

Can any of the company-specific risk be diversified away by investing in both Equity Growth and Sit Quality 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 Equity Growth and Sit Quality into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Equity Growth Fund and Sit Quality Income, you can compare the effects of market volatilities on Equity Growth and Sit Quality 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 Equity Growth with a short position of Sit Quality. Check out your portfolio center. Please also check ongoing floating volatility patterns of Equity Growth and Sit Quality.

Diversification Opportunities for Equity Growth and Sit Quality

0.0

Correlation Coefficient

Equity Growth  Sit Quality

Pay attention - limited upside

The 3 months correlation between Equity and Sit is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Equity Growth Fund and Sit Quality Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sit Quality Income and Equity Growth 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 Equity Growth Fund are associated (or correlated) with Sit Quality. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sit Quality Income has no effect on the direction of Equity Growth i.e., Equity Growth and Sit Quality go up and down completely randomly.

Pair Corralation between Equity Growth and Sit Quality

If you would invest (100.00) in Sit Quality Income on December 28, 2024 and sell it today you would earn a total of  100.00  from holding Sit Quality Income or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Equity Growth Fund  vs.  Sit Quality Income

Equity Growth

Risk-Adjusted Performance

Very Weak

Over the last 90 days Equity Growth Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Equity Growth is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Sit Quality Income

Risk-Adjusted Performance

Good

Over the last 90 days Sit Quality Income has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Sit Quality is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Equity Growth and Sit Quality

The main advantage of trading using opposite Equity Growth and Sit Quality positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Equity Growth position performs unexpectedly, Sit Quality 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 Quality will offset losses from the drop in Sit Quality's long position.

The idea behind Equity Growth Fund and Sit Quality Income 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.