Correlation Between Growth Fund and Simt Large
Can any of the company-specific risk be diversified away by investing in both Growth Fund and Simt Large 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 Growth Fund and Simt Large into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Growth Fund Of and Simt Large Cap, you can compare the effects of market volatilities on Growth Fund and Simt Large 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 Growth Fund with a short position of Simt Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Growth Fund and Simt Large.
Diversification Opportunities for Growth Fund and Simt Large
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Growth and Simt is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Growth Fund Of and Simt Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simt Large Cap and Growth Fund 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 Growth Fund Of are associated (or correlated) with Simt Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simt Large Cap has no effect on the direction of Growth Fund i.e., Growth Fund and Simt Large go up and down completely randomly.
Pair Corralation between Growth Fund and Simt Large
Assuming the 90 days horizon Growth Fund Of is expected to generate 0.72 times more return on investment than Simt Large. However, Growth Fund Of is 1.38 times less risky than Simt Large. It trades about -0.08 of its potential returns per unit of risk. Simt Large Cap is currently generating about -0.13 per unit of risk. If you would invest 7,081 in Growth Fund Of on October 9, 2024 and sell it today you would lose (527.00) from holding Growth Fund Of or give up 7.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Growth Fund Of vs. Simt Large Cap
Performance |
| Timeline |
| Growth Fund |
| Simt Large Cap |
Growth Fund and Simt Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Growth Fund and Simt Large
The main advantage of trading using opposite Growth Fund and Simt Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Growth Fund position performs unexpectedly, Simt Large 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 Large will offset losses from the drop in Simt Large's long position.| Growth Fund vs. Short Duration Inflation | Growth Fund vs. Lord Abbett Inflation | Growth Fund vs. Ab Bond Inflation | Growth Fund vs. Inflation Protected Bond Fund |
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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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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