Correlation Between Ultranasdaq-100 Profund and Sit Mid

Can any of the company-specific risk be diversified away by investing in both Ultranasdaq-100 Profund and Sit Mid 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 Ultranasdaq-100 Profund and Sit Mid into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ultranasdaq 100 Profund Ultranasdaq 100 and Sit Mid Cap, you can compare the effects of market volatilities on Ultranasdaq-100 Profund and Sit Mid 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 Ultranasdaq-100 Profund with a short position of Sit Mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ultranasdaq-100 Profund and Sit Mid.

Diversification Opportunities for Ultranasdaq-100 Profund and Sit Mid

0.95

Correlation Coefficient

Ultranasdaq-100 Profund  Sit Mid

Almost no diversification

The 3 months correlation between Ultranasdaq-100 and Sit is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Ultranasdaq 100 Profund Ultran and Sit Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sit Mid Cap and Ultranasdaq-100 Profund 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 Ultranasdaq 100 Profund Ultranasdaq 100 are associated (or correlated) with Sit Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sit Mid Cap has no effect on the direction of Ultranasdaq-100 Profund i.e., Ultranasdaq-100 Profund and Sit Mid go up and down completely randomly.

Pair Corralation between Ultranasdaq-100 Profund and Sit Mid

Assuming the 90 days horizon Ultranasdaq 100 Profund Ultranasdaq 100 is expected to under-perform the Sit Mid. In addition to that, Ultranasdaq-100 Profund is 2.05 times more volatile than Sit Mid Cap. It trades about -0.11 of its total potential returns per unit of risk. Sit Mid Cap is currently generating about -0.13 per unit of volatility. If you would invest  2,434  in Sit Mid Cap on December 29, 2024 and sell it today you would lose (271.00) from holding Sit Mid Cap or give up 11.13% of portfolio value over 90 days.

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

Ultranasdaq 100 Profund Ultran  vs.  Sit Mid Cap

Ultranasdaq 100 Profund

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ultranasdaq 100 Profund Ultranasdaq 100 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 April 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Sit Mid Cap

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sit Mid Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Ultranasdaq-100 Profund and Sit Mid

The main advantage of trading using opposite Ultranasdaq-100 Profund and Sit Mid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ultranasdaq-100 Profund position performs unexpectedly, Sit Mid 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 Mid will offset losses from the drop in Sit Mid's long position.

The idea behind Ultranasdaq 100 Profund Ultranasdaq 100 and Sit Mid 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.