Correlation Between Siit Large and Siit Dynamic

Can any of the company-specific risk be diversified away by investing in both Siit Large and Siit Dynamic 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 Siit Dynamic 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 Siit Dynamic Asset, you can compare the effects of market volatilities on Siit Large and Siit Dynamic 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 Siit Dynamic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siit Large and Siit Dynamic.

Diversification Opportunities for Siit Large and Siit Dynamic

0.99

Correlation Coefficient

Siit Large  Siit Dynamic

No risk reduction

The 3 months correlation between Siit and Siit is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Siit Large Cap and Siit Dynamic Asset in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siit Dynamic Asset 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 Siit Dynamic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siit Dynamic Asset has no effect on the direction of Siit Large i.e., Siit Large and Siit Dynamic go up and down completely randomly.

Pair Corralation between Siit Large and Siit Dynamic

Assuming the 90 days horizon Siit Large is expected to generate 1.01 times less return on investment than Siit Dynamic. But when comparing it to its historical volatility, Siit Large Cap is 1.18 times less risky than Siit Dynamic. It trades about 0.4 of its potential returns per unit of risk. Siit Dynamic Asset is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest  2,313  in Siit Dynamic Asset on September 4, 2024 and sell it today you would earn a total of  152.00  from holding Siit Dynamic Asset or generate 6.57% return on investment over 90 days.

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

Siit Large Cap  vs.  Siit Dynamic Asset

Siit Large Cap

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Siit Large Cap are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Siit Large may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Siit Dynamic Asset

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Siit Dynamic Asset are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Siit Dynamic may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Siit Large and Siit Dynamic

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

The idea behind Siit Large Cap and Siit Dynamic Asset 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.