Correlation Between Simt Small and Enhanced Fixed
Can any of the company-specific risk be diversified away by investing in both Simt Small and Enhanced Fixed 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 Small and Enhanced Fixed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Simt Small Cap and Enhanced Fixed Income, you can compare the effects of market volatilities on Simt Small and Enhanced Fixed 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 Small with a short position of Enhanced Fixed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simt Small and Enhanced Fixed.
Diversification Opportunities for Simt Small and Enhanced Fixed
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Simt and Enhanced is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Simt Small Cap and Enhanced Fixed Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enhanced Fixed Income and Simt Small 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 Small Cap are associated (or correlated) with Enhanced Fixed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enhanced Fixed Income has no effect on the direction of Simt Small i.e., Simt Small and Enhanced Fixed go up and down completely randomly.
Pair Corralation between Simt Small and Enhanced Fixed
Assuming the 90 days horizon Simt Small Cap is expected to generate 3.61 times more return on investment than Enhanced Fixed. However, Simt Small is 3.61 times more volatile than Enhanced Fixed Income. It trades about 0.16 of its potential returns per unit of risk. Enhanced Fixed Income is currently generating about 0.14 per unit of risk. If you would invest 3,626 in Simt Small Cap on October 25, 2024 and sell it today you would earn a total of 120.00 from holding Simt Small Cap or generate 3.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Simt Small Cap vs. Enhanced Fixed Income
Performance |
| Timeline |
| Simt Small Cap |
| Enhanced Fixed Income |
Simt Small and Enhanced Fixed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Simt Small and Enhanced Fixed
The main advantage of trading using opposite Simt Small and Enhanced Fixed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simt Small position performs unexpectedly, Enhanced Fixed 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 Enhanced Fixed will offset losses from the drop in Enhanced Fixed's long position.| Simt Small vs. Needham Aggressive Growth | Simt Small vs. Rational Defensive Growth | Simt Small vs. T Rowe Price | Simt Small vs. Qs Defensive Growth |
| Enhanced Fixed vs. Allianzgi Convertible Income | Enhanced Fixed vs. Advent Claymore Convertible | Enhanced Fixed vs. Gabelli Convertible And | Enhanced Fixed vs. Lord Abbett Convertible |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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