Correlation Between Global Stock and Sit International
Can any of the company-specific risk be diversified away by investing in both Global Stock and Sit International 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 Global Stock and Sit International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Stock Fund and Sit International Growth, you can compare the effects of market volatilities on Global Stock and Sit International 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 Global Stock with a short position of Sit International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Stock and Sit International.
Diversification Opportunities for Global Stock and Sit International
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Global and Sit is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Global Stock Fund and Sit International Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sit International Growth and Global Stock 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 Global Stock Fund are associated (or correlated) with Sit International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sit International Growth has no effect on the direction of Global Stock i.e., Global Stock and Sit International go up and down completely randomly.
Pair Corralation between Global Stock and Sit International
Assuming the 90 days horizon Global Stock is expected to generate 4.2 times less return on investment than Sit International. But when comparing it to its historical volatility, Global Stock Fund is 1.07 times less risky than Sit International. It trades about 0.03 of its potential returns per unit of risk. Sit International Growth is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 2,468 in Sit International Growth on June 12, 2025 and sell it today you would earn a total of 125.00 from holding Sit International Growth or generate 5.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Stock Fund vs. Sit International Growth
Performance |
| Timeline |
| Global Stock |
| Sit International Growth |
Global Stock and Sit International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Stock and Sit International
The main advantage of trading using opposite Global Stock and Sit International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Stock position performs unexpectedly, Sit International 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 International will offset losses from the drop in Sit International's long position.| Global Stock vs. Invesco Disciplined Equity | Global Stock vs. T Rowe Price | Global Stock vs. Global Stock Fund | Global Stock vs. Lord Abbett Developing |
| Sit International vs. Evaluator Moderate Rms | Sit International vs. Putnam Retirement Advantage | Sit International vs. Blackrock Moderate Prepared | Sit International vs. Tiaa Cref Lifecycle Retirement |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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