Correlation Between Simt Real and Sit International
Can any of the company-specific risk be diversified away by investing in both Simt Real and Sit International 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 Real and Sit International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Simt Real Return and Sit International Equity, you can compare the effects of market volatilities on Simt Real and Sit International 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 Real with a short position of Sit International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simt Real and Sit International.
Diversification Opportunities for Simt Real and Sit International
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Simt and Sit is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Simt Real Return and Sit International Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sit International Equity and Simt Real 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 Real Return are associated (or correlated) with Sit International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sit International Equity has no effect on the direction of Simt Real i.e., Simt Real and Sit International go up and down completely randomly.
Pair Corralation between Simt Real and Sit International
Assuming the 90 days horizon Simt Real is expected to generate 1.92 times less return on investment than Sit International. But when comparing it to its historical volatility, Simt Real Return is 5.17 times less risky than Sit International. It trades about 0.12 of its potential returns per unit of risk. Sit International Equity is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,160 in Sit International Equity on August 25, 2024 and sell it today you would earn a total of 86.00 from holding Sit International Equity or generate 7.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Simt Real Return vs. Sit International Equity
Performance |
| Timeline |
| Simt Real Return |
| Sit International Equity |
Simt Real and Sit International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Simt Real and Sit International
The main advantage of trading using opposite Simt Real and Sit International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simt Real position performs unexpectedly, Sit International 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 Sit International will offset losses from the drop in Sit International's long position.| Simt Real vs. Simt Multi Asset Accumulation | Simt Real vs. Saat Market Growth | Simt Real vs. Simt Small Cap | Simt Real vs. Siit Screened World |
| Sit International vs. Simt Multi Asset Accumulation | Sit International vs. Saat Market Growth | Sit International vs. Simt Real Return | Sit International vs. Simt Small Cap |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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