Correlation Between Siit Small and Federated Mdt
Can any of the company-specific risk be diversified away by investing in both Siit Small and Federated Mdt 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 Federated Mdt into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Siit Small Cap and Federated Mdt Small, you can compare the effects of market volatilities on Siit Small and Federated Mdt 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 Federated Mdt. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siit Small and Federated Mdt.
Diversification Opportunities for Siit Small and Federated Mdt
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Siit and Federated is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Siit Small Cap and Federated Mdt Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Mdt Small 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 Cap are associated (or correlated) with Federated Mdt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Mdt Small has no effect on the direction of Siit Small i.e., Siit Small and Federated Mdt go up and down completely randomly.
Pair Corralation between Siit Small and Federated Mdt
Assuming the 90 days horizon Siit Small is expected to generate 1.24 times less return on investment than Federated Mdt. But when comparing it to its historical volatility, Siit Small Cap is 1.05 times less risky than Federated Mdt. It trades about 0.15 of its potential returns per unit of risk. Federated Mdt Small is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 2,093 in Federated Mdt Small on June 9, 2025 and sell it today you would earn a total of 181.00 from holding Federated Mdt Small or generate 8.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Siit Small Cap vs. Federated Mdt Small
Performance |
| Timeline |
| Siit Small Cap |
| Federated Mdt Small |
Siit Small and Federated Mdt Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Siit Small and Federated Mdt
The main advantage of trading using opposite Siit Small and Federated Mdt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siit Small position performs unexpectedly, Federated Mdt 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 Federated Mdt will offset losses from the drop in Federated Mdt's long position.| Siit Small vs. Msift High Yield | Siit Small vs. Multi Manager High Yield | Siit Small vs. Pax High Yield | Siit Small vs. City National Rochdale |
| Federated Mdt vs. Jpmorgan Emerging Markets | Federated Mdt vs. Payden Emerging Markets | Federated Mdt vs. Morgan Stanley Emerging | Federated Mdt vs. Dodge Cox Emerging |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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