Correlation Between Simt Real and Aig Government
Can any of the company-specific risk be diversified away by investing in both Simt Real and Aig Government 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 Aig Government 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 Aig Government Money, you can compare the effects of market volatilities on Simt Real and Aig Government 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 Aig Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simt Real and Aig Government.
Diversification Opportunities for Simt Real and Aig Government
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Simt and Aig is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Simt Real Return and Aig Government Money in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aig Government Money 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 Aig Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aig Government Money has no effect on the direction of Simt Real i.e., Simt Real and Aig Government go up and down completely randomly.
Pair Corralation between Simt Real and Aig Government
Assuming the 90 days horizon Simt Real Return is expected to generate 0.89 times more return on investment than Aig Government. However, Simt Real Return is 1.12 times less risky than Aig Government. It trades about 0.11 of its potential returns per unit of risk. Aig Government Money is currently generating about 0.06 per unit of risk. If you would invest 901.00 in Simt Real Return on September 2, 2024 and sell it today you would earn a total of 64.00 from holding Simt Real Return or generate 7.1% 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. Aig Government Money
Performance |
| Timeline |
| Simt Real Return |
| Aig Government Money |
Simt Real and Aig Government Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Simt Real and Aig Government
The main advantage of trading using opposite Simt Real and Aig Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simt Real position performs unexpectedly, Aig Government 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 Aig Government will offset losses from the drop in Aig Government's long position.| Simt Real vs. Ab All Market | Simt Real vs. Ep Emerging Markets | Simt Real vs. Barings Emerging Markets | Simt Real vs. Western Asset Diversified |
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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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