Correlation Between Simt Real and Simt Multi-asset
Can any of the company-specific risk be diversified away by investing in both Simt Real and Simt Multi-asset 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 Simt Multi-asset 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 Simt Multi Asset Income, you can compare the effects of market volatilities on Simt Real and Simt Multi-asset 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 Simt Multi-asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simt Real and Simt Multi-asset.
Diversification Opportunities for Simt Real and Simt Multi-asset
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Simt and Simt is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Simt Real Return and Simt Multi Asset Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simt Multi Asset 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 Simt Multi-asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simt Multi Asset has no effect on the direction of Simt Real i.e., Simt Real and Simt Multi-asset go up and down completely randomly.
Pair Corralation between Simt Real and Simt Multi-asset
Assuming the 90 days horizon Simt Real is expected to generate 1.1 times less return on investment than Simt Multi-asset. But when comparing it to its historical volatility, Simt Real Return is 1.72 times less risky than Simt Multi-asset. It trades about 0.36 of its potential returns per unit of risk. Simt Multi Asset Income is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 982.00 in Simt Multi Asset Income on October 22, 2024 and sell it today you would earn a total of 9.00 from holding Simt Multi Asset Income or generate 0.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Simt Real Return vs. Simt Multi Asset Income
Performance |
| Timeline |
| Simt Real Return |
| Simt Multi Asset |
Simt Real and Simt Multi-asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Simt Real and Simt Multi-asset
The main advantage of trading using opposite Simt Real and Simt Multi-asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simt Real position performs unexpectedly, Simt Multi-asset 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 Multi-asset will offset losses from the drop in Simt Multi-asset's long position.| Simt Real vs. Dws Equity Sector | Simt Real vs. Gmo Global Equity | Simt Real vs. Gmo Global Equity | Simt Real vs. Dreyfusstandish Global Fixed |
| Simt Multi-asset vs. Simt E Fixed | Simt Multi-asset vs. Sit Emerging Markets | Simt Multi-asset vs. Simt Global Managed | Simt Multi-asset vs. Sit International Equity |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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