Correlation Between Sa Emerging and Mid Capitalization

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

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

Diversification Opportunities for Sa Emerging and Mid Capitalization

0.15

Correlation Coefficient

Sa Emerging  Mid Capitalization

Average diversification

The 3 months correlation between SAEMX and MID is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Sa Emerging Markets and Mid Capitalization Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mid Capitalization and Sa 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 Sa Emerging Markets are associated (or correlated) with Mid Capitalization. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mid Capitalization has no effect on the direction of Sa Emerging i.e., Sa Emerging and Mid Capitalization go up and down completely randomly.

Pair Corralation between Sa Emerging and Mid Capitalization

Assuming the 90 days horizon Sa Emerging Markets is expected to generate 0.26 times more return on investment than Mid Capitalization. However, Sa Emerging Markets is 3.87 times less risky than Mid Capitalization. It trades about 0.08 of its potential returns per unit of risk. Mid Capitalization Portfolio is currently generating about -0.09 per unit of risk. If you would invest  1,214  in Sa Emerging Markets on September 13, 2025 and sell it today you would earn a total of  43.00  from holding Sa Emerging Markets or generate 3.54% return on investment over 90 days.

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

Sa Emerging Markets  vs.  Mid Capitalization Portfolio

Sa Emerging Markets

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Sa Emerging Markets are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong primary indicators, Sa Emerging is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Mid Capitalization

Risk-Adjusted Performance

Weakest

Over the last 90 days Mid Capitalization Portfolio has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in January 2026. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Sa Emerging and Mid Capitalization

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

The idea behind Sa Emerging Markets and Mid Capitalization Portfolio 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.

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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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.