Correlation Between Cargile Fund and Siit Global

Can any of the company-specific risk be diversified away by investing in both Cargile Fund and Siit Global 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 Cargile Fund and Siit Global into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cargile Fund and Siit Global Managed, you can compare the effects of market volatilities on Cargile Fund and Siit Global 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 Cargile Fund with a short position of Siit Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cargile Fund and Siit Global.

Diversification Opportunities for Cargile Fund and Siit Global

0.27

Correlation Coefficient

Cargile Fund  Siit Global

Modest diversification

The 3 months correlation between Cargile and Siit is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Cargile Fund and Siit Global Managed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siit Global Managed and Cargile Fund 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 Cargile Fund are associated (or correlated) with Siit Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siit Global Managed has no effect on the direction of Cargile Fund i.e., Cargile Fund and Siit Global go up and down completely randomly.

Pair Corralation between Cargile Fund and Siit Global

Assuming the 90 days horizon Cargile Fund is expected to generate 1.51 times less return on investment than Siit Global. But when comparing it to its historical volatility, Cargile Fund is 1.15 times less risky than Siit Global. It trades about 0.01 of its potential returns per unit of risk. Siit Global Managed is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  1,049  in Siit Global Managed on October 4, 2024 and sell it today you would earn a total of  57.00  from holding Siit Global Managed or generate 5.43% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Cargile Fund  vs.  Siit Global Managed

Cargile Fund

Risk-Adjusted Performance

0 of 100

Very Weak

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

Siit Global Managed

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Siit Global Managed 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 February 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Cargile Fund and Siit Global

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

The idea behind Cargile Fund and Siit Global Managed 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.