Correlation Between Simt Small and Siit Intermediate
Can any of the company-specific risk be diversified away by investing in both Simt Small and Siit Intermediate 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 Siit Intermediate 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 Siit Intermediate Duration, you can compare the effects of market volatilities on Simt Small and Siit Intermediate 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 Siit Intermediate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simt Small and Siit Intermediate.
Diversification Opportunities for Simt Small and Siit Intermediate
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Simt and Siit is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Simt Small Cap and Siit Intermediate Duration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siit Intermediate 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 Siit Intermediate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siit Intermediate has no effect on the direction of Simt Small i.e., Simt Small and Siit Intermediate go up and down completely randomly.
Pair Corralation between Simt Small and Siit Intermediate
Assuming the 90 days horizon Simt Small Cap is expected to generate 3.32 times more return on investment than Siit Intermediate. However, Simt Small is 3.32 times more volatile than Siit Intermediate Duration. It trades about 0.15 of its potential returns per unit of risk. Siit Intermediate Duration is currently generating about 0.02 per unit of risk. If you would invest 3,567 in Simt Small Cap on October 20, 2024 and sell it today you would earn a total of 102.00 from holding Simt Small Cap or generate 2.86% 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. Siit Intermediate Duration
Performance |
| Timeline |
| Simt Small Cap |
| Siit Intermediate |
Simt Small and Siit Intermediate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Simt Small and Siit Intermediate
The main advantage of trading using opposite Simt Small and Siit Intermediate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simt Small position performs unexpectedly, Siit Intermediate 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 Siit Intermediate will offset losses from the drop in Siit Intermediate'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 |
| Siit Intermediate vs. Leader Short Term Bond | Siit Intermediate vs. Cmg Ultra Short | Siit Intermediate vs. Transam Short Term Bond | Siit Intermediate vs. Blackrock Global Longshort |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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