Correlation Between Siit Small and Siit Large

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

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

Diversification Opportunities for Siit Small and Siit Large

0.97

Correlation Coefficient

Siit Small  Siit Large

Almost no diversification

The 3 months correlation between Siit and Siit is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Siit Small Mid and Siit Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siit Large Cap and Siit Small 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 Small Mid are associated (or correlated) with Siit Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siit Large Cap has no effect on the direction of Siit Small i.e., Siit Small and Siit Large go up and down completely randomly.

Pair Corralation between Siit Small and Siit Large

Assuming the 90 days horizon Siit Small is expected to generate 1.03 times less return on investment than Siit Large. In addition to that, Siit Small is 1.45 times more volatile than Siit Large Cap. It trades about 0.2 of its total potential returns per unit of risk. Siit Large Cap is currently generating about 0.3 per unit of volatility. If you would invest  20,359  in Siit Large Cap on September 6, 2024 and sell it today you would earn a total of  2,818  from holding Siit Large Cap or generate 13.84% return on investment over 90 days.

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

Siit Small Mid  vs.  Siit Large Cap

Siit Small Mid

Risk-Adjusted Performance

15 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Siit Small Mid are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Siit Small may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Siit Large Cap

Risk-Adjusted Performance

23 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Siit Large Cap are ranked lower than 23 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Siit Large showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Siit Small and Siit Large

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

The idea behind Siit Small Mid and Siit Large 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.