Correlation Between Global Gold and Simt Multi
Can any of the company-specific risk be diversified away by investing in both Global Gold and Simt Multi 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 Global Gold and Simt Multi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Gold Fund and Simt Multi Asset Inflation, you can compare the effects of market volatilities on Global Gold and Simt Multi 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 Global Gold with a short position of Simt Multi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Gold and Simt Multi.
Diversification Opportunities for Global Gold and Simt Multi
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Global and Simt is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Global Gold Fund and Simt Multi Asset Inflation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simt Multi Asset and Global Gold 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 Global Gold Fund are associated (or correlated) with Simt Multi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simt Multi Asset has no effect on the direction of Global Gold i.e., Global Gold and Simt Multi go up and down completely randomly.
Pair Corralation between Global Gold and Simt Multi
Assuming the 90 days horizon Global Gold Fund is expected to generate 4.72 times more return on investment than Simt Multi. However, Global Gold is 4.72 times more volatile than Simt Multi Asset Inflation. It trades about 0.05 of its potential returns per unit of risk. Simt Multi Asset Inflation is currently generating about -0.03 per unit of risk. If you would invest 1,108 in Global Gold Fund on October 13, 2024 and sell it today you would earn a total of 127.00 from holding Global Gold Fund or generate 11.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Gold Fund vs. Simt Multi Asset Inflation
Performance |
| Timeline |
| Global Gold Fund |
| Simt Multi Asset |
Global Gold and Simt Multi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Gold and Simt Multi
The main advantage of trading using opposite Global Gold and Simt Multi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Gold position performs unexpectedly, Simt Multi 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 Simt Multi will offset losses from the drop in Simt Multi's long position.| Global Gold vs. Angel Oak Financial | Global Gold vs. Gabelli Global Financial | Global Gold vs. Financial Industries Fund | Global Gold vs. Icon Financial Fund |
| Simt Multi vs. Global Gold Fund | Simt Multi vs. Great West Goldman Sachs | Simt Multi vs. Franklin Gold Precious | Simt Multi vs. Europac Gold Fund |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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