Correlation Between Inflation Protected and Simt Multi-asset
Can any of the company-specific risk be diversified away by investing in both Inflation Protected and Simt Multi-asset 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 Inflation Protected and Simt Multi-asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inflation Protected Bond Fund and Simt Multi Asset Inflation, you can compare the effects of market volatilities on Inflation Protected and Simt Multi-asset 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 Inflation Protected with a short position of Simt Multi-asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inflation Protected and Simt Multi-asset.
Diversification Opportunities for Inflation Protected and Simt Multi-asset
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Inflation and Simt is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Inflation Protected Bond 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 Inflation Protected 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 Inflation Protected Bond Fund are associated (or correlated) with Simt Multi-asset. 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 Inflation Protected i.e., Inflation Protected and Simt Multi-asset go up and down completely randomly.
Pair Corralation between Inflation Protected and Simt Multi-asset
Assuming the 90 days horizon Inflation Protected is expected to generate 2.78 times less return on investment than Simt Multi-asset. In addition to that, Inflation Protected is 2.39 times more volatile than Simt Multi Asset Inflation. It trades about 0.08 of its total potential returns per unit of risk. Simt Multi Asset Inflation is currently generating about 0.52 per unit of volatility. If you would invest 768.00 in Simt Multi Asset Inflation on November 4, 2024 and sell it today you would earn a total of 15.00 from holding Simt Multi Asset Inflation or generate 1.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Inflation Protected Bond Fund vs. Simt Multi Asset Inflation
Performance |
| Timeline |
| Inflation Protected |
| Simt Multi Asset |
Inflation Protected and Simt Multi-asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inflation Protected and Simt Multi-asset
The main advantage of trading using opposite Inflation Protected and Simt Multi-asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inflation Protected position performs unexpectedly, Simt Multi-asset 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-asset will offset losses from the drop in Simt Multi-asset's long position.| Inflation Protected vs. Nasdaq 100 2x Strategy | Inflation Protected vs. Western Assets Emerging | Inflation Protected vs. Investec Emerging Markets | Inflation Protected vs. Barings Emerging Markets |
| Simt Multi-asset vs. Calvert Developed Market | Simt Multi-asset vs. Aqr Sustainable Long Short | Simt Multi-asset vs. Aqr Equity Market | Simt Multi-asset vs. Mid Cap 15x Strategy |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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