Correlation Between Simt Core and Simt High
Can any of the company-specific risk be diversified away by investing in both Simt Core and Simt High 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 Simt Core and Simt High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Simt E Fixed and Simt High Yield, you can compare the effects of market volatilities on Simt Core and Simt High 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 Simt Core with a short position of Simt High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simt Core and Simt High.
Diversification Opportunities for Simt Core and Simt High
Excellent diversification
The 3 months correlation between Simt and Simt is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Simt E Fixed and Simt High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simt High Yield and Simt Core 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 Simt E Fixed are associated (or correlated) with Simt High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simt High Yield has no effect on the direction of Simt Core i.e., Simt Core and Simt High go up and down completely randomly.
Pair Corralation between Simt Core and Simt High
Assuming the 90 days horizon Simt Core is expected to generate 1.43 times less return on investment than Simt High. In addition to that, Simt Core is 1.03 times more volatile than Simt High Yield. It trades about 0.03 of its total potential returns per unit of risk. Simt High Yield is currently generating about 0.05 per unit of volatility. If you would invest 491.00 in Simt High Yield on August 30, 2024 and sell it today you would earn a total of 51.00 from holding Simt High Yield or generate 10.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Simt E Fixed vs. Simt High Yield
Performance |
| Timeline |
| Simt E Fixed |
| Simt High Yield |
Simt Core and Simt High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Simt Core and Simt High
The main advantage of trading using opposite Simt Core and Simt High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simt Core position performs unexpectedly, Simt High 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 High will offset losses from the drop in Simt High's long position.| Simt Core vs. Vanguard Total Bond | Simt Core vs. Vanguard Total Bond | Simt Core vs. Vanguard Total Bond | Simt Core vs. Bond Fund Of |
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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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