Correlation Between Stet Intermediate and Simt High
Can any of the company-specific risk be diversified away by investing in both Stet Intermediate 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 Stet Intermediate and Simt High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stet Intermediate Term and Simt High Yield, you can compare the effects of market volatilities on Stet Intermediate 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 Stet Intermediate with a short position of Simt High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stet Intermediate and Simt High.
Diversification Opportunities for Stet Intermediate and Simt High
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Stet and Simt is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Stet Intermediate Term 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 Stet Intermediate 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 Intermediate Term 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 Stet Intermediate i.e., Stet Intermediate and Simt High go up and down completely randomly.
Pair Corralation between Stet Intermediate and Simt High
Assuming the 90 days horizon Stet Intermediate is expected to generate 1.31 times less return on investment than Simt High. But when comparing it to its historical volatility, Stet Intermediate Term is 2.3 times less risky than Simt High. It trades about 0.08 of its potential returns per unit of risk. Simt High Yield is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 492.00 in Simt High Yield on August 26, 2024 and sell it today you would earn a total of 48.00 from holding Simt High Yield or generate 9.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stet Intermediate Term vs. Simt High Yield
Performance |
| Timeline |
| Stet Intermediate Term |
| Simt High Yield |
Stet Intermediate and Simt High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stet Intermediate and Simt High
The main advantage of trading using opposite Stet Intermediate and Simt High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stet Intermediate 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.| Stet Intermediate vs. Sit International Equity | Stet Intermediate vs. Intermediate Taxamt Free Fund | Stet Intermediate vs. Goldman Sachs Short | Stet Intermediate vs. Simt High Yield |
| Simt High vs. Baron Health Care | Simt High vs. Hartford Healthcare Hls | Simt High vs. Health Biotchnology Portfolio | Simt High vs. Allianzgi Health Sciences |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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