Correlation Between Sit Mid and Sit Mutual

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

By analyzing existing cross correlation between Sit Mid Cap and Sit Mutual Funds, you can compare the effects of market volatilities on Sit Mid and Sit Mutual 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 Mid with a short position of Sit Mutual. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sit Mid and Sit Mutual.

Diversification Opportunities for Sit Mid and Sit Mutual

-0.34

Correlation Coefficient

Sit Mid  Sit Mutual

Very good diversification

The 3 months correlation between Sit and Sit is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Sit Mid Cap and Sit Mutual Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sit Mutual Funds and Sit Mid 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 Mid Cap are associated (or correlated) with Sit Mutual. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sit Mutual Funds has no effect on the direction of Sit Mid i.e., Sit Mid and Sit Mutual go up and down completely randomly.

Pair Corralation between Sit Mid and Sit Mutual

Assuming the 90 days horizon Sit Mid Cap is expected to generate 5.37 times more return on investment than Sit Mutual. However, Sit Mid is 5.37 times more volatile than Sit Mutual Funds. It trades about 0.2 of its potential returns per unit of risk. Sit Mutual Funds is currently generating about 0.0 per unit of risk. If you would invest  2,308  in Sit Mid Cap on September 12, 2024 and sell it today you would earn a total of  273.00  from holding Sit Mid Cap or generate 11.83% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Sit Mid Cap  vs.  Sit Mutual Funds

Sit Mid Cap

Risk-Adjusted Performance

16 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sit Mid Cap are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Sit Mid may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Sit Mutual Funds

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Sit Mid and Sit Mutual

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

The idea behind Sit Mid Cap and Sit Mutual Funds 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.