Correlation Between Profunds Large and Simt Multi-asset
Can any of the company-specific risk be diversified away by investing in both Profunds Large 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 Profunds Large 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 Profunds Large Cap Growth and Simt Multi Asset Inflation, you can compare the effects of market volatilities on Profunds Large 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 Profunds Large with a short position of Simt Multi-asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Profunds Large and Simt Multi-asset.
Diversification Opportunities for Profunds Large and Simt Multi-asset
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Profunds and Simt is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Profunds Large Cap Growth 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 Profunds Large 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 Profunds Large Cap Growth 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 Profunds Large i.e., Profunds Large and Simt Multi-asset go up and down completely randomly.
Pair Corralation between Profunds Large and Simt Multi-asset
Assuming the 90 days horizon Profunds Large Cap Growth is expected to generate 3.88 times more return on investment than Simt Multi-asset. However, Profunds Large is 3.88 times more volatile than Simt Multi Asset Inflation. It trades about 0.1 of its potential returns per unit of risk. Simt Multi Asset Inflation is currently generating about 0.07 per unit of risk. If you would invest 2,229 in Profunds Large Cap Growth on November 9, 2024 and sell it today you would earn a total of 1,425 from holding Profunds Large Cap Growth or generate 63.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Profunds Large Cap Growth vs. Simt Multi Asset Inflation
Performance |
| Timeline |
| Profunds Large Cap |
| Simt Multi Asset |
Profunds Large and Simt Multi-asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Profunds Large and Simt Multi-asset
The main advantage of trading using opposite Profunds Large and Simt Multi-asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Profunds Large 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.| Profunds Large vs. Bbh Intermediate Municipal | Profunds Large vs. Vanguard Telecommunication Services | Profunds Large vs. Ab Municipal Bond | Profunds Large vs. Ab Municipal Bond |
| Simt Multi-asset vs. Ab Bond Inflation | Simt Multi-asset vs. Goldman Sachs Short | Simt Multi-asset vs. Dreyfusstandish Global Fixed | Simt Multi-asset vs. Gmo High Yield |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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