Correlation Between Simt High and Sdit Gnma
Can any of the company-specific risk be diversified away by investing in both Simt High and Sdit Gnma 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 High and Sdit Gnma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Simt High Yield and Sdit Gnma Fund, you can compare the effects of market volatilities on Simt High and Sdit Gnma 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 High with a short position of Sdit Gnma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simt High and Sdit Gnma.
Diversification Opportunities for Simt High and Sdit Gnma
Excellent diversification
The 3 months correlation between Simt and Sdit is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Simt High Yield and Sdit Gnma Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sdit Gnma Fund and Simt High 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 High Yield are associated (or correlated) with Sdit Gnma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sdit Gnma Fund has no effect on the direction of Simt High i.e., Simt High and Sdit Gnma go up and down completely randomly.
Pair Corralation between Simt High and Sdit Gnma
Assuming the 90 days horizon Simt High Yield is expected to generate 0.57 times more return on investment than Sdit Gnma. However, Simt High Yield is 1.74 times less risky than Sdit Gnma. It trades about 0.18 of its potential returns per unit of risk. Sdit Gnma Fund is currently generating about 0.09 per unit of risk. If you would invest 538.00 in Simt High Yield on August 30, 2024 and sell it today you would earn a total of 4.00 from holding Simt High Yield or generate 0.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Simt High Yield vs. Sdit Gnma Fund
Performance |
| Timeline |
| Simt High Yield |
| Sdit Gnma Fund |
Simt High and Sdit Gnma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Simt High and Sdit Gnma
The main advantage of trading using opposite Simt High and Sdit Gnma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simt High position performs unexpectedly, Sdit Gnma 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 Sdit Gnma will offset losses from the drop in Sdit Gnma's long position.| Simt High vs. Artisan High Income | Simt High vs. Sit Emerging Markets | Simt High vs. Sit International Equity | Simt High vs. Stet Intermediate Term |
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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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