Correlation Between Saat Market and Simt Small
Can any of the company-specific risk be diversified away by investing in both Saat Market and Simt Small 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 Saat Market and Simt Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Saat Market Growth and Simt Small Cap, you can compare the effects of market volatilities on Saat Market and Simt Small 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 Saat Market with a short position of Simt Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saat Market and Simt Small.
Diversification Opportunities for Saat Market and Simt Small
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SAAT and Simt is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Saat Market Growth and Simt Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simt Small Cap and Saat Market 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 Saat Market Growth are associated (or correlated) with Simt Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simt Small Cap has no effect on the direction of Saat Market i.e., Saat Market and Simt Small go up and down completely randomly.
Pair Corralation between Saat Market and Simt Small
Assuming the 90 days horizon Saat Market is expected to generate 5.88 times less return on investment than Simt Small. But when comparing it to its historical volatility, Saat Market Growth is 4.26 times less risky than Simt Small. It trades about 0.14 of its potential returns per unit of risk. Simt Small Cap is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 2,660 in Simt Small Cap on August 29, 2024 and sell it today you would earn a total of 208.00 from holding Simt Small Cap or generate 7.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Saat Market Growth vs. Simt Small Cap
Performance |
| Timeline |
| Saat Market Growth |
| Simt Small Cap |
Saat Market and Simt Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Saat Market and Simt Small
The main advantage of trading using opposite Saat Market and Simt Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saat Market position performs unexpectedly, Simt Small 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 Small will offset losses from the drop in Simt Small's long position.| Saat Market vs. Rbc Emerging Markets | Saat Market vs. Shelton Emerging Markets | Saat Market vs. Federated Emerging Market | Saat Market vs. Barings Emerging Markets |
| Simt Small vs. Vanguard Small Cap Value | Simt Small vs. Vanguard Small Cap Value | Simt Small vs. American Beacon Small |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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