Correlation Between Small Cap and Siit Emerging

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

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

Diversification Opportunities for Small Cap and Siit Emerging

0.54

Correlation Coefficient

Small Cap  Siit Emerging

Very weak diversification

The 3 months correlation between Small and Siit is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Small Cap Profund Small Cap 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 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 Small Cap Profund Small Cap 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 Small Cap i.e., Small Cap and Siit Emerging go up and down completely randomly.

Pair Corralation between Small Cap and Siit Emerging

Assuming the 90 days horizon Small Cap Profund Small Cap is expected to generate 4.87 times more return on investment than Siit Emerging. However, Small Cap is 4.87 times more volatile than Siit Emerging Markets. It trades about 0.14 of its potential returns per unit of risk. Siit Emerging Markets is currently generating about 0.42 per unit of risk. If you would invest  8,400  in Small Cap Profund Small Cap on May 16, 2025 and sell it today you would earn a total of  807.00  from holding Small Cap Profund Small Cap or generate 9.61% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.39%
Values	Daily Returns

Small Cap Profund Small Cap  vs.  Siit Emerging Markets

Small Cap Profund

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Small Cap Profund Small Cap are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Small Cap may actually be approaching a critical reversion point that can send shares even higher in September 2025.

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 Small Cap and Siit Emerging

The main advantage of trading using opposite Small Cap and Siit Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Small Cap 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 Small Cap Profund Small Cap 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.

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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 Global Correlations module to find global opportunities by holding instruments from different markets.