Correlation Between Simt Tax-managed and Akre Focus
Can any of the company-specific risk be diversified away by investing in both Simt Tax-managed and Akre Focus 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 Akre Focus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Simt Tax Managed Managed and Akre Focus Fund, you can compare the effects of market volatilities on Simt Tax-managed and Akre Focus 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 Akre Focus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simt Tax-managed and Akre Focus.
Diversification Opportunities for Simt Tax-managed and Akre Focus
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Simt and AKRE is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Simt Tax Managed Managed and Akre Focus Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Akre Focus Fund 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 Managed are associated (or correlated) with Akre Focus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Akre Focus Fund has no effect on the direction of Simt Tax-managed i.e., Simt Tax-managed and Akre Focus go up and down completely randomly.
Pair Corralation between Simt Tax-managed and Akre Focus
Assuming the 90 days horizon Simt Tax-managed is expected to generate 2.2 times less return on investment than Akre Focus. But when comparing it to its historical volatility, Simt Tax Managed Managed is 1.24 times less risky than Akre Focus. It trades about 0.1 of its potential returns per unit of risk. Akre Focus Fund is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 7,161 in Akre Focus Fund on August 30, 2024 and sell it today you would earn a total of 407.00 from holding Akre Focus Fund or generate 5.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Simt Tax Managed Managed vs. Akre Focus Fund
Performance |
| Timeline |
| Simt Tax Managed |
| Akre Focus Fund |
Simt Tax-managed and Akre Focus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Simt Tax-managed and Akre Focus
The main advantage of trading using opposite Simt Tax-managed and Akre Focus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simt Tax-managed position performs unexpectedly, Akre Focus 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 Akre Focus will offset losses from the drop in Akre Focus' long position.| Simt Tax-managed vs. Dodge Cox Stock | Simt Tax-managed vs. American Mutual Fund | Simt Tax-managed vs. American Funds American | Simt Tax-managed vs. American Funds American |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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