Correlation Between Simt Small and Simt Dynamic
Can any of the company-specific risk be diversified away by investing in both Simt Small and Simt Dynamic 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 Simt Dynamic 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 Simt Dynamic Asset, you can compare the effects of market volatilities on Simt Small and Simt Dynamic 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 Simt Dynamic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simt Small and Simt Dynamic.
Diversification Opportunities for Simt Small and Simt Dynamic
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Simt and Simt is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Simt Small Cap and Simt Dynamic Asset in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simt Dynamic Asset 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 Simt Dynamic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simt Dynamic Asset has no effect on the direction of Simt Small i.e., Simt Small and Simt Dynamic go up and down completely randomly.
Pair Corralation between Simt Small and Simt Dynamic
Assuming the 90 days horizon Simt Small Cap is expected to under-perform the Simt Dynamic. In addition to that, Simt Small is 1.1 times more volatile than Simt Dynamic Asset. It trades about -0.1 of its total potential returns per unit of risk. Simt Dynamic Asset is currently generating about -0.08 per unit of volatility. If you would invest 1,813 in Simt Dynamic Asset on October 20, 2024 and sell it today you would lose (100.00) from holding Simt Dynamic Asset or give up 5.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Simt Small Cap vs. Simt Dynamic Asset
Performance |
| Timeline |
| Simt Small Cap |
| Simt Dynamic Asset |
Simt Small and Simt Dynamic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Simt Small and Simt Dynamic
The main advantage of trading using opposite Simt Small and Simt Dynamic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simt Small position performs unexpectedly, Simt Dynamic 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 Dynamic will offset losses from the drop in Simt Dynamic's long position.| Simt Small vs. Inverse Nasdaq 100 Strategy | Simt Small vs. Wcm Focused Emerging | Simt Small vs. Nasdaq 100 2x Strategy | Simt Small vs. Ashmore Emerging Markets |
| Simt Dynamic vs. Upright Growth Income | Simt Dynamic vs. T Rowe Price | Simt Dynamic vs. L Abbett Growth | Simt Dynamic vs. Transamerica Capital Growth |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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