Correlation Between Simt Large and Simt Managed
Can any of the company-specific risk be diversified away by investing in both Simt Large and Simt Managed 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 Large and Simt Managed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Simt Large Cap and Simt Managed Volatility, you can compare the effects of market volatilities on Simt Large and Simt Managed 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 Large with a short position of Simt Managed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simt Large and Simt Managed.
Diversification Opportunities for Simt Large and Simt Managed
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Simt and Simt is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Simt Large Cap 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 Simt 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 Simt Large Cap are associated (or correlated) with Simt Managed. 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 Simt Large i.e., Simt Large and Simt Managed go up and down completely randomly.
Pair Corralation between Simt Large and Simt Managed
Assuming the 90 days horizon Simt Large Cap is expected to under-perform the Simt Managed. But the mutual fund apears to be less risky and, when comparing its historical volatility, Simt Large Cap is 1.1 times less risky than Simt Managed. The mutual fund trades about -0.17 of its potential returns per unit of risk. The Simt Managed Volatility is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest 1,677 in Simt Managed Volatility on September 14, 2024 and sell it today you would lose (16.00) from holding Simt Managed Volatility or give up 0.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Simt Large Cap vs. Simt Managed Volatility
Performance |
| Timeline |
| Simt Large Cap |
| Simt Managed Volatility |
Simt Large and Simt Managed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Simt Large and Simt Managed
The main advantage of trading using opposite Simt Large and Simt Managed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simt Large position performs unexpectedly, Simt Managed 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 Managed will offset losses from the drop in Simt Managed's long position.| Simt Large vs. Simt Managed Volatility | Simt Large vs. Simt Tax Managed Managed | Simt Large vs. Virtus Kar Small Cap | Simt Large vs. Walden Asset Management |
| Simt Managed vs. Hartford Schroders Smallmid | Simt Managed vs. Hartford Schroders Smallmid | Simt Managed vs. Aquagold International | Simt Managed vs. Morningstar Unconstrained Allocation |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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