Correlation Between Summit Global and Siit Dynamic

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

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

Diversification Opportunities for Summit Global and Siit Dynamic

0.96

Correlation Coefficient

Summit Global  Siit Dynamic

Almost no diversification

The 3 months correlation between Summit and Siit is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Summit Global Investments 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 Summit 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 Summit Global Investments 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 Summit Global i.e., Summit Global and Siit Dynamic go up and down completely randomly.

Pair Corralation between Summit Global and Siit Dynamic

Assuming the 90 days horizon Summit Global Investments is expected to generate 0.59 times more return on investment than Siit Dynamic. However, Summit Global Investments is 1.69 times less risky than Siit Dynamic. It trades about 0.11 of its potential returns per unit of risk. Siit Dynamic Asset is currently generating about -0.05 per unit of risk. If you would invest  3,136  in Summit Global Investments on December 20, 2024 and sell it today you would earn a total of  120.00  from holding Summit Global Investments or generate 3.83% return on investment over 90 days.

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

Summit Global Investments  vs.  Siit Dynamic Asset

Summit Global Investments

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Summit Global Investments are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Summit Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Siit Dynamic Asset

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Summit Global and Siit Dynamic

The main advantage of trading using opposite Summit Global and Siit Dynamic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Summit Global 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 Summit Global Investments 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.