Correlation Between Simt Sp and Saat Market
Can any of the company-specific risk be diversified away by investing in both Simt Sp and Saat Market 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 Sp and Saat Market into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Simt Sp 500 and Saat Market Growth, you can compare the effects of market volatilities on Simt Sp and Saat Market 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 Sp with a short position of Saat Market. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simt Sp and Saat Market.
Diversification Opportunities for Simt Sp and Saat Market
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Simt and Saat is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Simt Sp 500 and Saat Market Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saat Market Growth and Simt Sp 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 Sp 500 are associated (or correlated) with Saat Market. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saat Market Growth has no effect on the direction of Simt Sp i.e., Simt Sp and Saat Market go up and down completely randomly.
Pair Corralation between Simt Sp and Saat Market
Assuming the 90 days horizon Simt Sp 500 is expected to generate 2.05 times more return on investment than Saat Market. However, Simt Sp is 2.05 times more volatile than Saat Market Growth. It trades about 0.06 of its potential returns per unit of risk. Saat Market Growth is currently generating about 0.09 per unit of risk. If you would invest 8,408 in Simt Sp 500 on November 9, 2024 and sell it today you would earn a total of 1,354 from holding Simt Sp 500 or generate 16.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.63% |
| Values | Daily Returns |
Simt Sp 500 vs. Saat Market Growth
Performance |
| Timeline |
| Simt Sp 500 |
| Saat Market Growth |
Simt Sp and Saat Market Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Simt Sp and Saat Market
The main advantage of trading using opposite Simt Sp and Saat Market positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simt Sp position performs unexpectedly, Saat Market 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 Market will offset losses from the drop in Saat Market's long position.| Simt Sp vs. Simt Small Cap | Simt Sp vs. Simt Small Cap | Simt Sp vs. Simt Large Cap | Simt Sp vs. Sit International Equity |
| Saat Market vs. Balanced Strategy Fund | Saat Market vs. Artisan Developing World | Saat Market vs. Transamerica Emerging Markets | Saat Market vs. Jpmorgan Emerging Markets |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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