Correlation Between Simt Multi-asset and Inverse Nasdaq
Can any of the company-specific risk be diversified away by investing in both Simt Multi-asset and Inverse Nasdaq 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 Multi-asset and Inverse Nasdaq into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Simt Multi Asset Inflation and Inverse Nasdaq 100 Strategy, you can compare the effects of market volatilities on Simt Multi-asset and Inverse Nasdaq 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 Multi-asset with a short position of Inverse Nasdaq. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simt Multi-asset and Inverse Nasdaq.
Diversification Opportunities for Simt Multi-asset and Inverse Nasdaq
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Simt and Inverse is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Simt Multi Asset Inflation and Inverse Nasdaq 100 Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inverse Nasdaq 100 and Simt Multi-asset 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 Multi Asset Inflation are associated (or correlated) with Inverse Nasdaq. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inverse Nasdaq 100 has no effect on the direction of Simt Multi-asset i.e., Simt Multi-asset and Inverse Nasdaq go up and down completely randomly.
Pair Corralation between Simt Multi-asset and Inverse Nasdaq
Assuming the 90 days horizon Simt Multi Asset Inflation is expected to generate 0.24 times more return on investment than Inverse Nasdaq. However, Simt Multi Asset Inflation is 4.24 times less risky than Inverse Nasdaq. It trades about 0.07 of its potential returns per unit of risk. Inverse Nasdaq 100 Strategy is currently generating about -0.09 per unit of risk. If you would invest 726.00 in Simt Multi Asset Inflation on November 9, 2024 and sell it today you would earn a total of 64.00 from holding Simt Multi Asset Inflation or generate 8.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Simt Multi Asset Inflation vs. Inverse Nasdaq 100 Strategy
Performance |
| Timeline |
| Simt Multi Asset |
| Inverse Nasdaq 100 |
Simt Multi-asset and Inverse Nasdaq Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Simt Multi-asset and Inverse Nasdaq
The main advantage of trading using opposite Simt Multi-asset and Inverse Nasdaq positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simt Multi-asset position performs unexpectedly, Inverse Nasdaq 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 Inverse Nasdaq will offset losses from the drop in Inverse Nasdaq's long position.| Simt Multi-asset vs. Ab Bond Inflation | Simt Multi-asset vs. Goldman Sachs Short | Simt Multi-asset vs. Dreyfusstandish Global Fixed | Simt Multi-asset vs. Gmo High Yield |
| Inverse Nasdaq vs. Ab Bond Inflation | Inverse Nasdaq vs. Ab Bond Inflation | Inverse Nasdaq vs. American Funds Inflation | Inverse Nasdaq vs. Ab Bond Inflation |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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