Correlation Between Fundamental Large and Siit Global

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

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

Diversification Opportunities for Fundamental Large and Siit Global

0.89

Correlation Coefficient

Fundamental Large  Siit Global

Very poor diversification

The 3 months correlation between Fundamental and Siit is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Fundamental Large Cap 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 Fundamental Large 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 Fundamental Large Cap 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 Fundamental Large i.e., Fundamental Large and Siit Global go up and down completely randomly.

Pair Corralation between Fundamental Large and Siit Global

Assuming the 90 days horizon Fundamental Large Cap is expected to generate 1.54 times more return on investment than Siit Global. However, Fundamental Large is 1.54 times more volatile than Siit Global Managed. It trades about 0.05 of its potential returns per unit of risk. Siit Global Managed is currently generating about 0.03 per unit of risk. If you would invest  5,816  in Fundamental Large Cap on October 22, 2024 and sell it today you would earn a total of  1,527  from holding Fundamental Large Cap or generate 26.26% return on investment over 90 days.

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

Fundamental Large Cap  vs.  Siit Global Managed

Fundamental Large Cap

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fundamental Large Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Fundamental Large 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 latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Fundamental Large and Siit Global

The main advantage of trading using opposite Fundamental Large and Siit Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fundamental Large 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 Fundamental Large Cap 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 CEOs Directory module to screen CEOs from public companies around the world.