Correlation Between Siit Emerging and Transamerica Emerging
Can any of the company-specific risk be diversified away by investing in both Siit Emerging and Transamerica Emerging 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 Emerging and Transamerica Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Siit Emerging Markets and Transamerica Emerging Markets, you can compare the effects of market volatilities on Siit Emerging and Transamerica Emerging 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 Emerging with a short position of Transamerica Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siit Emerging and Transamerica Emerging.
Diversification Opportunities for Siit Emerging and Transamerica Emerging
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Siit and Transamerica is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Siit Emerging Markets and Transamerica Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transamerica Emerging and Siit Emerging 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 Emerging Markets are associated (or correlated) with Transamerica Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transamerica Emerging has no effect on the direction of Siit Emerging i.e., Siit Emerging and Transamerica Emerging go up and down completely randomly.
Pair Corralation between Siit Emerging and Transamerica Emerging
Assuming the 90 days horizon Siit Emerging Markets is expected to under-perform the Transamerica Emerging. But the mutual fund apears to be less risky and, when comparing its historical volatility, Siit Emerging Markets is 1.08 times less risky than Transamerica Emerging. The mutual fund trades about -0.02 of its potential returns per unit of risk. The Transamerica Emerging Markets is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 754.00 in Transamerica Emerging Markets on January 26, 2024 and sell it today you would earn a total of 1.00 from holding Transamerica Emerging Markets or generate 0.13% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Siit Emerging Markets vs. Transamerica Emerging Markets
Performance |
Timeline |
Siit Emerging Markets |
Transamerica Emerging |
Siit Emerging and Transamerica Emerging Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Siit Emerging and Transamerica Emerging
The main advantage of trading using opposite Siit Emerging and Transamerica Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siit Emerging position performs unexpectedly, Transamerica Emerging 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 Transamerica Emerging will offset losses from the drop in Transamerica Emerging's long position.Siit Emerging vs. Amana Income Fund | Siit Emerging vs. Amana Growth Fund | Siit Emerging vs. Amana Participation Fund | Siit Emerging vs. HUMANA INC |
Transamerica Emerging vs. Amana Income Fund | Transamerica Emerging vs. Amana Growth Fund | Transamerica Emerging vs. Amana Participation Fund | Transamerica Emerging vs. HUMANA INC |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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