Correlation Between Sit Small and Ivy Mid
Can any of the company-specific risk be diversified away by investing in both Sit Small and Ivy 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 Sit Small and Ivy Mid into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sit Small Cap and Ivy Mid Cap, you can compare the effects of market volatilities on Sit Small and Ivy 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 Sit Small with a short position of Ivy Mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sit Small and Ivy Mid.
Diversification Opportunities for Sit Small and Ivy Mid
Poor diversification
The 3 months correlation between Sit and Ivy is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Sit Small Cap and Ivy Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ivy Mid Cap and Sit 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 Sit Small Cap are associated (or correlated) with Ivy Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ivy Mid Cap has no effect on the direction of Sit Small i.e., Sit Small and Ivy Mid go up and down completely randomly.
Pair Corralation between Sit Small and Ivy Mid
Assuming the 90 days horizon Sit Small Cap is expected to generate 0.93 times more return on investment than Ivy Mid. However, Sit Small Cap is 1.08 times less risky than Ivy Mid. It trades about -0.07 of its potential returns per unit of risk. Ivy Mid Cap is currently generating about -0.08 per unit of risk. If you would invest 6,681 in Sit Small Cap on February 9, 2024 and sell it today you would lose (138.00) from holding Sit Small Cap or give up 2.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Sit Small Cap vs. Ivy Mid Cap
Performance |
| Timeline |
| Sit Small Cap |
| Ivy Mid Cap |
Sit Small and Ivy Mid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sit Small and Ivy Mid
The main advantage of trading using opposite Sit Small and Ivy Mid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sit Small position performs unexpectedly, Ivy 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 Ivy Mid will offset losses from the drop in Ivy Mid's long position.| Sit Small vs. Mfs Mid Cap | Sit Small vs. Janus Triton Fund | Sit Small vs. Europacific Growth Fund | Sit Small vs. Mfs International Value |
| Ivy Mid vs. Mfs Mid Cap | Ivy Mid vs. Janus Triton Fund | Ivy Mid vs. Europacific Growth Fund | Ivy Mid vs. Mfs International Value |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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