Correlation Between Smallcap Growth and Siit High
Can any of the company-specific risk be diversified away by investing in both Smallcap Growth and Siit High 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 Smallcap Growth and Siit High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Smallcap Growth Fund and Siit High Yield, you can compare the effects of market volatilities on Smallcap Growth and Siit High 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 Smallcap Growth with a short position of Siit High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Smallcap Growth and Siit High.
Diversification Opportunities for Smallcap Growth and Siit High
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Smallcap and Siit is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Smallcap Growth Fund and Siit High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siit High Yield and Smallcap Growth 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 Smallcap Growth Fund are associated (or correlated) with Siit High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siit High Yield has no effect on the direction of Smallcap Growth i.e., Smallcap Growth and Siit High go up and down completely randomly.
Pair Corralation between Smallcap Growth and Siit High
Assuming the 90 days horizon Smallcap Growth Fund is expected to under-perform the Siit High. In addition to that, Smallcap Growth is 7.57 times more volatile than Siit High Yield. It trades about -0.04 of its total potential returns per unit of risk. Siit High Yield is currently generating about 0.08 per unit of volatility. If you would invest 704.00 in Siit High Yield on September 26, 2024 and sell it today you would earn a total of 7.00 from holding Siit High Yield or generate 0.99% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Smallcap Growth Fund vs. Siit High Yield
Performance |
Timeline |
Smallcap Growth |
Siit High Yield |
Smallcap Growth and Siit High Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Smallcap Growth and Siit High
The main advantage of trading using opposite Smallcap Growth and Siit High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Smallcap Growth position performs unexpectedly, Siit High 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 High will offset losses from the drop in Siit High's long position.Smallcap Growth vs. Strategic Asset Management | Smallcap Growth vs. Strategic Asset Management | Smallcap Growth vs. Strategic Asset Management | Smallcap Growth vs. Strategic Asset Management |
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Check out your portfolio center.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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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