Correlation Between Simt Global and Simt Us
Can any of the company-specific risk be diversified away by investing in both Simt Global and Simt Us 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 Global and Simt Us into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Simt Global Managed and Simt Managed Volatility, you can compare the effects of market volatilities on Simt Global and Simt Us 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 Global with a short position of Simt Us. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simt Global and Simt Us.
Diversification Opportunities for Simt Global and Simt Us
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Simt and Simt is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Simt Global Managed and Simt Managed Volatility in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simt Managed Volatility and Simt Global 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 Global Managed are associated (or correlated) with Simt Us. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simt Managed Volatility has no effect on the direction of Simt Global i.e., Simt Global and Simt Us go up and down completely randomly.
Pair Corralation between Simt Global and Simt Us
Assuming the 90 days horizon Simt Global is expected to generate 1.16 times less return on investment than Simt Us. But when comparing it to its historical volatility, Simt Global Managed is 1.16 times less risky than Simt Us. It trades about 0.31 of its potential returns per unit of risk. Simt Managed Volatility is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 1,388 in Simt Managed Volatility on November 3, 2024 and sell it today you would earn a total of 51.00 from holding Simt Managed Volatility or generate 3.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Simt Global Managed vs. Simt Managed Volatility
Performance |
| Timeline |
| Simt Global Managed |
| Simt Managed Volatility |
Simt Global and Simt Us Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Simt Global and Simt Us
The main advantage of trading using opposite Simt Global and Simt Us positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simt Global position performs unexpectedly, Simt Us 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 Us will offset losses from the drop in Simt Us' long position.The idea behind Simt Global Managed and Simt Managed Volatility pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Simt Us vs. Simt Global Managed | Simt Us vs. Simt High Yield | Simt Us vs. Sdit Short Duration | Simt Us vs. Simt Real Return |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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