Correlation Between Siit World and Simt Small
Can any of the company-specific risk be diversified away by investing in both Siit World and Simt Small 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 Siit World and Simt Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Siit World Select and Simt Small Cap, you can compare the effects of market volatilities on Siit World and Simt Small 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 Siit World with a short position of Simt Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siit World and Simt Small.
Diversification Opportunities for Siit World and Simt Small
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Siit and Simt is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Siit World Select and Simt Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simt Small Cap and Siit World 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 Siit World Select are associated (or correlated) with Simt Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simt Small Cap has no effect on the direction of Siit World i.e., Siit World and Simt Small go up and down completely randomly.
Pair Corralation between Siit World and Simt Small
Assuming the 90 days horizon Siit World Select is expected to generate 0.39 times more return on investment than Simt Small. However, Siit World Select is 2.54 times less risky than Simt Small. It trades about 0.12 of its potential returns per unit of risk. Simt Small Cap is currently generating about 0.01 per unit of risk. If you would invest 1,302 in Siit World Select on September 14, 2024 and sell it today you would earn a total of 14.00 from holding Siit World Select or generate 1.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Siit World Select vs. Simt Small Cap
Performance |
| Timeline |
| Siit World Select |
| Simt Small Cap |
Siit World and Simt Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Siit World and Simt Small
The main advantage of trading using opposite Siit World and Simt Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siit World position performs unexpectedly, Simt Small 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 Small will offset losses from the drop in Simt Small's long position.| Siit World vs. Simt Multi Asset Accumulation | Siit World vs. Saat Market Growth | Siit World vs. Simt Real Return | Siit World vs. Simt Small Cap |
| Simt Small vs. Ridgeworth Seix Government | Simt Small vs. Prudential Government Income | Simt Small vs. Short Term Government Fund | Simt Small vs. Dunham Porategovernment Bond |
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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