Correlation Between Stet California and Simt Us
Can any of the company-specific risk be diversified away by investing in both Stet California and Simt Us 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 Stet California and Simt Us into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stet California Municipal and Simt Managed Volatility, you can compare the effects of market volatilities on Stet California and Simt Us 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 Stet California with a short position of Simt Us. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stet California and Simt Us.
Diversification Opportunities for Stet California and Simt Us
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Stet and Simt is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Stet California Municipal and Simt Managed Volatility in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simt Managed Volatility and Stet California 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 Stet California Municipal are associated (or correlated) with Simt Us. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simt Managed Volatility has no effect on the direction of Stet California i.e., Stet California and Simt Us go up and down completely randomly.
Pair Corralation between Stet California and Simt Us
Assuming the 90 days horizon Stet California is expected to generate 3.56 times less return on investment than Simt Us. But when comparing it to its historical volatility, Stet California Municipal is 4.32 times less risky than Simt Us. It trades about 0.06 of its potential returns per unit of risk. Simt Managed Volatility is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,475 in Simt Managed Volatility on August 31, 2024 and sell it today you would earn a total of 228.00 from holding Simt Managed Volatility or generate 15.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.73% |
| Values | Daily Returns |
Stet California Municipal vs. Simt Managed Volatility
Performance |
| Timeline |
| Stet California Municipal |
| Simt Managed Volatility |
Stet California and Simt Us Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stet California and Simt Us
The main advantage of trading using opposite Stet California and Simt Us positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stet California position performs unexpectedly, Simt Us 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 Us will offset losses from the drop in Simt Us' long position.| Stet California vs. Siit High Yield | Stet California vs. Blackrock High Yield | Stet California vs. Multi Manager High Yield | Stet California vs. Prudential Short Duration |
| Simt Us vs. Simt Global Managed | Simt Us vs. Simt High Yield | Simt Us vs. Sdit Short Duration | Simt Us vs. Simt Real Return |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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