Correlation Between Frost Kempner and Simt Real

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Can any of the company-specific risk be diversified away by investing in both Frost Kempner and Simt Real 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 Frost Kempner and Simt Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Frost Kempner Multi Cap and Simt Real Estate, you can compare the effects of market volatilities on Frost Kempner and Simt Real 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 Frost Kempner with a short position of Simt Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Frost Kempner and Simt Real.

Diversification Opportunities for Frost Kempner and Simt Real

0.37
  Correlation Coefficient

Weak diversification

The 3 months correlation between Frost and Simt is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Frost Kempner Multi Cap and Simt Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simt Real Estate and Frost Kempner 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 Frost Kempner Multi Cap are associated (or correlated) with Simt Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simt Real Estate has no effect on the direction of Frost Kempner i.e., Frost Kempner and Simt Real go up and down completely randomly.

Pair Corralation between Frost Kempner and Simt Real

Assuming the 90 days horizon Frost Kempner Multi Cap is expected to generate 0.67 times more return on investment than Simt Real. However, Frost Kempner Multi Cap is 1.5 times less risky than Simt Real. It trades about 0.1 of its potential returns per unit of risk. Simt Real Estate is currently generating about 0.05 per unit of risk. If you would invest  994.00  in Frost Kempner Multi Cap on September 12, 2024 and sell it today you would earn a total of  271.00  from holding Frost Kempner Multi Cap or generate 27.26% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy99.72%
ValuesDaily Returns

Frost Kempner Multi Cap  vs.  Simt Real Estate

 Performance 
       Timeline  
Frost Kempner Multi 

Risk-Adjusted Performance

12 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Frost Kempner Multi Cap are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Frost Kempner is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Simt Real Estate 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Simt Real Estate has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Simt Real is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Frost Kempner and Simt Real Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Frost Kempner and Simt Real

The main advantage of trading using opposite Frost Kempner and Simt Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Frost Kempner position performs unexpectedly, Simt Real 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 Real will offset losses from the drop in Simt Real's long position.
The idea behind Frost Kempner Multi Cap and Simt Real Estate 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.

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