Correlation Between Strategic Allocation and Siit Emerging

Can any of the company-specific risk be diversified away by investing in both Strategic Allocation and Siit 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 Strategic Allocation and Siit Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Strategic Allocation Moderate and Siit Emerging Markets, you can compare the effects of market volatilities on Strategic Allocation and Siit 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 Strategic Allocation with a short position of Siit Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Strategic Allocation and Siit Emerging.

Diversification Opportunities for Strategic Allocation and Siit Emerging

0.7

Correlation Coefficient

Strategic Allocation  Siit Emerging

Poor diversification

The 3 months correlation between Strategic and Siit is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Strategic Allocation Moderate and Siit Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siit Emerging Markets and Strategic Allocation 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 Strategic Allocation Moderate are associated (or correlated) with Siit Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siit Emerging Markets has no effect on the direction of Strategic Allocation i.e., Strategic Allocation and Siit Emerging go up and down completely randomly.

Pair Corralation between Strategic Allocation and Siit Emerging

Assuming the 90 days horizon Strategic Allocation is expected to generate 1.11 times less return on investment than Siit Emerging. In addition to that, Strategic Allocation is 1.96 times more volatile than Siit Emerging Markets. It trades about 0.19 of its total potential returns per unit of risk. Siit Emerging Markets is currently generating about 0.42 per unit of volatility. If you would invest  854.00  in Siit Emerging Markets on May 11, 2025 and sell it today you would earn a total of  53.00  from holding Siit Emerging Markets or generate 6.21% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Strategic Allocation Moderate  vs.  Siit Emerging Markets

Strategic Allocation

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Strategic Allocation Moderate are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Strategic Allocation is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Siit Emerging Markets

Risk-Adjusted Performance

High

Compared to the overall equity markets, risk-adjusted returns on investments in Siit Emerging Markets are ranked lower than 33 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Siit Emerging is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Strategic Allocation and Siit Emerging

The main advantage of trading using opposite Strategic Allocation and Siit Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Strategic Allocation position performs unexpectedly, Siit 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 Siit Emerging will offset losses from the drop in Siit Emerging's long position.

The idea behind Strategic Allocation Moderate and Siit Emerging Markets pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.