Correlation Between Global Gold and Simt Small
Can any of the company-specific risk be diversified away by investing in both Global Gold and Simt Small 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 Small 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 Small Cap, you can compare the effects of market volatilities on Global Gold and Simt Small 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 Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Gold and Simt Small.
Diversification Opportunities for Global Gold and Simt Small
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Global and Simt is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Global Gold Fund and Simt Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simt Small Cap 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 Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simt Small Cap has no effect on the direction of Global Gold i.e., Global Gold and Simt Small go up and down completely randomly.
Pair Corralation between Global Gold and Simt Small
Assuming the 90 days horizon Global Gold Fund is expected to generate 1.46 times more return on investment than Simt Small. However, Global Gold is 1.46 times more volatile than Simt Small Cap. It trades about 0.07 of its potential returns per unit of risk. Simt Small Cap is currently generating about 0.08 per unit of risk. If you would invest 886.00 in Global Gold Fund on September 12, 2024 and sell it today you would earn a total of 411.00 from holding Global Gold Fund or generate 46.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Gold Fund vs. Simt Small Cap
Performance |
| Timeline |
| Global Gold Fund |
| Simt Small Cap |
Global Gold and Simt Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Gold and Simt Small
The main advantage of trading using opposite Global Gold and Simt Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Gold position performs unexpectedly, Simt Small 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 Small will offset losses from the drop in Simt Small's long position.| Global Gold vs. Technology Ultrasector Profund | Global Gold vs. Towpath Technology | Global Gold vs. Columbia Global Technology | Global Gold vs. Goldman Sachs Technology |
| Simt Small vs. Sprott Gold Equity | Simt Small vs. Franklin Gold Precious | Simt Small vs. Great West Goldman Sachs | Simt Small vs. Global 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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