Correlation Between Siit Small and Sdit Gnma

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Can any of the company-specific risk be diversified away by investing in both Siit Small and Sdit Gnma 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 Sdit Gnma 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 Sdit Gnma Fund, you can compare the effects of market volatilities on Siit Small and Sdit Gnma 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 Sdit Gnma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siit Small and Sdit Gnma.

Diversification Opportunities for Siit Small and Sdit Gnma

-0.48
  Correlation Coefficient

Very good diversification

The 3 months correlation between Siit and Sdit is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Siit Small Mid and Sdit Gnma Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sdit Gnma Fund 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 Sdit Gnma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sdit Gnma Fund has no effect on the direction of Siit Small i.e., Siit Small and Sdit Gnma go up and down completely randomly.

Pair Corralation between Siit Small and Sdit Gnma

Assuming the 90 days horizon Siit Small Mid is expected to generate 3.56 times more return on investment than Sdit Gnma. However, Siit Small is 3.56 times more volatile than Sdit Gnma Fund. It trades about 0.04 of its potential returns per unit of risk. Sdit Gnma Fund is currently generating about -0.16 per unit of risk. If you would invest  1,101  in Siit Small Mid on September 19, 2024 and sell it today you would earn a total of  22.00  from holding Siit Small Mid or generate 2.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Siit Small Mid  vs.  Sdit Gnma Fund

 Performance 
       Timeline  
Siit Small Mid 

Risk-Adjusted Performance

2 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Siit Small Mid are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Siit Small is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Sdit Gnma Fund 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Sdit Gnma Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong primary indicators, Sdit Gnma is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Siit Small and Sdit Gnma Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Siit Small and Sdit Gnma

The main advantage of trading using opposite Siit Small and Sdit Gnma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siit Small position performs unexpectedly, Sdit Gnma 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 Sdit Gnma will offset losses from the drop in Sdit Gnma's long position.
The idea behind Siit Small Mid and Sdit Gnma Fund 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.

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