Correlation Between Simt Tax-managed and Stet California
Can any of the company-specific risk be diversified away by investing in both Simt Tax-managed and Stet California 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 Tax-managed and Stet California into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Simt Tax Managed Smallmid and Stet California Municipal, you can compare the effects of market volatilities on Simt Tax-managed and Stet California 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 Tax-managed with a short position of Stet California. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simt Tax-managed and Stet California.
Diversification Opportunities for Simt Tax-managed and Stet California
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Simt and Stet is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Simt Tax Managed Smallmid and Stet California Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stet California Municipal and Simt Tax-managed 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 Tax Managed Smallmid are associated (or correlated) with Stet California. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stet California Municipal has no effect on the direction of Simt Tax-managed i.e., Simt Tax-managed and Stet California go up and down completely randomly.
Pair Corralation between Simt Tax-managed and Stet California
Assuming the 90 days horizon Simt Tax Managed Smallmid is expected to generate 6.37 times more return on investment than Stet California. However, Simt Tax-managed is 6.37 times more volatile than Stet California Municipal. It trades about 0.11 of its potential returns per unit of risk. Stet California Municipal is currently generating about 0.03 per unit of risk. If you would invest 2,774 in Simt Tax Managed Smallmid on August 30, 2024 and sell it today you would earn a total of 247.00 from holding Simt Tax Managed Smallmid or generate 8.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Simt Tax Managed Smallmid vs. Stet California Municipal
Performance |
| Timeline |
| Simt Tax Managed |
| Stet California Municipal |
Simt Tax-managed and Stet California Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Simt Tax-managed and Stet California
The main advantage of trading using opposite Simt Tax-managed and Stet California positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simt Tax-managed position performs unexpectedly, Stet California 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 Stet California will offset losses from the drop in Stet California's long position.| Simt Tax-managed vs. Simt Tax Managed Large | Simt Tax-managed vs. Stet Intermediate Term | Simt Tax-managed vs. Sit International Equity |
| Stet California vs. Siit High Yield | Stet California vs. Blackrock High Yield | Stet California vs. Multi Manager High Yield | Stet California vs. Prudential Short Duration |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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