Correlation Between Siit Emerging and Dreyfus/newton International

Can any of the company-specific risk be diversified away by investing in both Siit Emerging and Dreyfus/newton International 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 Emerging and Dreyfus/newton International into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Siit Emerging Markets and Dreyfusnewton International Equity, you can compare the effects of market volatilities on Siit Emerging and Dreyfus/newton International 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 Emerging with a short position of Dreyfus/newton International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siit Emerging and Dreyfus/newton International.

Diversification Opportunities for Siit Emerging and Dreyfus/newton International

0.88

Correlation Coefficient

Siit Emerging  Dreyfus/newton International

Very poor diversification

The 3 months correlation between Siit and Dreyfus/newton is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Siit Emerging Markets and Dreyfusnewton International Eq in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreyfus/newton International and Siit Emerging 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 Emerging Markets are associated (or correlated) with Dreyfus/newton International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreyfus/newton International has no effect on the direction of Siit Emerging i.e., Siit Emerging and Dreyfus/newton International go up and down completely randomly.

Pair Corralation between Siit Emerging and Dreyfus/newton International

Assuming the 90 days horizon Siit Emerging Markets is expected to generate 0.45 times more return on investment than Dreyfus/newton International. However, Siit Emerging Markets is 2.23 times less risky than Dreyfus/newton International. It trades about 0.04 of its potential returns per unit of risk. Dreyfusnewton International Equity is currently generating about -0.03 per unit of risk. If you would invest  818.00  in Siit Emerging Markets on October 24, 2024 and sell it today you would earn a total of  120.00  from holding Siit Emerging Markets or generate 14.67% return on investment over 90 days.

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

Siit Emerging Markets  vs.  Dreyfusnewton International Eq

Siit Emerging Markets

Risk-Adjusted Performance

0 of 100

Very Weak

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

Dreyfus/newton International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dreyfusnewton International Equity has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Siit Emerging and Dreyfus/newton International

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

The idea behind Siit Emerging Markets and Dreyfusnewton International Equity 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.