Correlation Between Royce Small-cap and Sit Dividend
Can any of the company-specific risk be diversified away by investing in both Royce Small-cap and Sit Dividend 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 Royce Small-cap and Sit Dividend into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Royce Small Cap Value and Sit Dividend Growth, you can compare the effects of market volatilities on Royce Small-cap and Sit Dividend 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 Royce Small-cap with a short position of Sit Dividend. Check out your portfolio center. Please also check ongoing floating volatility patterns of Royce Small-cap and Sit Dividend.
Diversification Opportunities for Royce Small-cap and Sit Dividend
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Royce and Sit is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Royce Small Cap Value and Sit Dividend Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sit Dividend Growth and Royce Small-cap 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 Royce Small Cap Value are associated (or correlated) with Sit Dividend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sit Dividend Growth has no effect on the direction of Royce Small-cap i.e., Royce Small-cap and Sit Dividend go up and down completely randomly.
Pair Corralation between Royce Small-cap and Sit Dividend
Assuming the 90 days horizon Royce Small Cap Value is expected to under-perform the Sit Dividend. In addition to that, Royce Small-cap is 1.97 times more volatile than Sit Dividend Growth. It trades about -0.02 of its total potential returns per unit of risk. Sit Dividend Growth is currently generating about 0.12 per unit of volatility. If you would invest 1,726 in Sit Dividend Growth on August 20, 2025 and sell it today you would earn a total of 77.00 from holding Sit Dividend Growth or generate 4.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Royce Small Cap Value vs. Sit Dividend Growth
Performance |
| Timeline |
| Royce Small Cap |
| Sit Dividend Growth |
Royce Small-cap and Sit Dividend Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Royce Small-cap and Sit Dividend
The main advantage of trading using opposite Royce Small-cap and Sit Dividend positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Royce Small-cap position performs unexpectedly, Sit Dividend 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 Dividend will offset losses from the drop in Sit Dividend's long position.| Royce Small-cap vs. Neuberger Berman High | Royce Small-cap vs. Simt Tax Managed International | Royce Small-cap vs. Dreyfus Opportunistic Small | Royce Small-cap vs. Royce Micro Cap Fund |
| Sit Dividend vs. Sit Dividend Growth | Sit Dividend vs. Summit Global Investments | Sit Dividend vs. Columbia Adaptive Risk | Sit Dividend vs. Ashmore Emerging Markets |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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