Correlation Between Sit Global and Sit Mid
Can any of the company-specific risk be diversified away by investing in both Sit Global and Sit Mid 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 Sit Global and Sit Mid into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sit Global Dividend and Sit Mid Cap, you can compare the effects of market volatilities on Sit Global and Sit Mid 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 Sit Global with a short position of Sit Mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sit Global and Sit Mid.
Diversification Opportunities for Sit Global and Sit Mid
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sit and Sit is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Sit Global Dividend and Sit Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sit Mid Cap and Sit Global 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 Sit Global Dividend are associated (or correlated) with Sit Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sit Mid Cap has no effect on the direction of Sit Global i.e., Sit Global and Sit Mid go up and down completely randomly.
Pair Corralation between Sit Global and Sit Mid
Assuming the 90 days horizon Sit Global Dividend is expected to generate 0.64 times more return on investment than Sit Mid. However, Sit Global Dividend is 1.57 times less risky than Sit Mid. It trades about 0.07 of its potential returns per unit of risk. Sit Mid Cap is currently generating about -0.06 per unit of risk. If you would invest 2,773 in Sit Global Dividend on December 2, 2024 and sell it today you would earn a total of 57.00 from holding Sit Global Dividend or generate 2.06% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Sit Global Dividend vs. Sit Mid Cap
Performance |
Timeline |
Sit Global Dividend |
Sit Mid Cap |
Sit Global and Sit Mid Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Sit Global and Sit Mid
The main advantage of trading using opposite Sit Global and Sit Mid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sit Global position performs unexpectedly, Sit Mid 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 Mid will offset losses from the drop in Sit Mid's long position.Sit Global vs. Upright Assets Allocation | Sit Global vs. Enhanced Large Pany | Sit Global vs. Gmo Asset Allocation | Sit Global vs. Hartford Moderate Allocation |
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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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