Correlation Between Sit International and Simt Multi-asset
Can any of the company-specific risk be diversified away by investing in both Sit International 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 Sit International 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 Sit International Equity and Simt Multi Asset Accumulation, you can compare the effects of market volatilities on Sit International 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 Sit International with a short position of Simt Multi-asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sit International and Simt Multi-asset.
Diversification Opportunities for Sit International and Simt Multi-asset
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sit and Simt is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Sit International Equity and Simt Multi Asset Accumulation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simt Multi Asset and Sit International 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 Sit International Equity 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 Sit International i.e., Sit International and Simt Multi-asset go up and down completely randomly.
Pair Corralation between Sit International and Simt Multi-asset
Assuming the 90 days horizon Sit International Equity is expected to under-perform the Simt Multi-asset. In addition to that, Sit International is 1.33 times more volatile than Simt Multi Asset Accumulation. It trades about -0.23 of its total potential returns per unit of risk. Simt Multi Asset Accumulation is currently generating about -0.14 per unit of volatility. If you would invest 763.00 in Simt Multi Asset Accumulation on August 29, 2024 and sell it today you would lose (21.00) from holding Simt Multi Asset Accumulation or give up 2.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sit International Equity vs. Simt Multi Asset Accumulation
Performance |
| Timeline |
| Sit International Equity |
| Simt Multi Asset |
Sit International and Simt Multi-asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sit International and Simt Multi-asset
The main advantage of trading using opposite Sit International and Simt Multi-asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sit International 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.| Sit International vs. Queens Road Small | Sit International vs. Hennessy Nerstone Mid | Sit International vs. Heartland Value Plus | Sit International vs. Fpa Queens Road |
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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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