Correlation Between Simt Small and Saat Moderate
Can any of the company-specific risk be diversified away by investing in both Simt Small and Saat Moderate 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 Saat Moderate 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 Saat Moderate Strategy, you can compare the effects of market volatilities on Simt Small and Saat Moderate 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 Saat Moderate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simt Small and Saat Moderate.
Diversification Opportunities for Simt Small and Saat Moderate
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Simt and Saat is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Simt Small Cap and Saat Moderate Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saat Moderate Strategy 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 Saat Moderate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saat Moderate Strategy has no effect on the direction of Simt Small i.e., Simt Small and Saat Moderate go up and down completely randomly.
Pair Corralation between Simt Small and Saat Moderate
Assuming the 90 days horizon Simt Small Cap is expected to generate 5.99 times more return on investment than Saat Moderate. However, Simt Small is 5.99 times more volatile than Saat Moderate Strategy. It trades about 0.27 of its potential returns per unit of risk. Saat Moderate Strategy is currently generating about 0.15 per unit of risk. If you would invest 3,767 in Simt Small Cap on August 30, 2024 and sell it today you would earn a total of 360.00 from holding Simt Small Cap or generate 9.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Simt Small Cap vs. Saat Moderate Strategy
Performance |
| Timeline |
| Simt Small Cap |
| Saat Moderate Strategy |
Simt Small and Saat Moderate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Simt Small and Saat Moderate
The main advantage of trading using opposite Simt Small and Saat Moderate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simt Small position performs unexpectedly, Saat Moderate 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 Saat Moderate will offset losses from the drop in Saat Moderate's long position.| Simt Small vs. Pace Large Growth | Simt Small vs. Goldman Sachs Large | Simt Small vs. Hartford Moderate Allocation | Simt Small vs. T Rowe Price |
| Saat Moderate vs. Vanguard Wellesley Income | Saat Moderate vs. HUMANA INC | Saat Moderate vs. Aquagold International | Saat Moderate vs. Barloworld Ltd ADR |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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