Correlation Between Siit Large and Apexcm Small/mid

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

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

Diversification Opportunities for Siit Large and Apexcm Small/mid

0.57

Correlation Coefficient

Siit Large  Apexcm Small/mid

Very weak diversification

The 3 months correlation between Siit and Apexcm is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Siit Large Cap and Apexcm Smallmid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apexcm Smallmid Cap and Siit 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 Siit Large Cap are associated (or correlated) with Apexcm Small/mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apexcm Smallmid Cap has no effect on the direction of Siit Large i.e., Siit Large and Apexcm Small/mid go up and down completely randomly.

Pair Corralation between Siit Large and Apexcm Small/mid

Assuming the 90 days horizon Siit Large Cap is expected to generate 0.77 times more return on investment than Apexcm Small/mid. However, Siit Large Cap is 1.3 times less risky than Apexcm Small/mid. It trades about -0.07 of its potential returns per unit of risk. Apexcm Smallmid Cap is currently generating about -0.11 per unit of risk. If you would invest  19,783  in Siit Large Cap on December 20, 2024 and sell it today you would lose (834.00) from holding Siit Large Cap or give up 4.22% of portfolio value over 90 days.

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

Siit Large Cap  vs.  Apexcm Smallmid Cap

Siit Large Cap

Risk-Adjusted Performance

Very Weak

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

Apexcm Smallmid Cap

Risk-Adjusted Performance

Very Weak

Over the last 90 days Apexcm Smallmid Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's technical and fundamental 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 Siit Large and Apexcm Small/mid

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

The idea behind Siit Large Cap and Apexcm Smallmid Cap 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.