Correlation Between California Bond and Simt Multi-asset
Can any of the company-specific risk be diversified away by investing in both California Bond and Simt Multi-asset 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 California Bond and Simt Multi-asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between California Bond Fund and Simt Multi Asset Accumulation, you can compare the effects of market volatilities on California Bond and Simt Multi-asset 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 California Bond with a short position of Simt Multi-asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of California Bond and Simt Multi-asset.
Diversification Opportunities for California Bond and Simt Multi-asset
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between California and Simt is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding California Bond Fund and Simt Multi Asset Accumulation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simt Multi Asset and California Bond 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 California Bond Fund are associated (or correlated) with Simt Multi-asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simt Multi Asset has no effect on the direction of California Bond i.e., California Bond and Simt Multi-asset go up and down completely randomly.
Pair Corralation between California Bond and Simt Multi-asset
Assuming the 90 days horizon California Bond is expected to generate 1.69 times less return on investment than Simt Multi-asset. But when comparing it to its historical volatility, California Bond Fund is 1.29 times less risky than Simt Multi-asset. It trades about 0.22 of its potential returns per unit of risk. Simt Multi Asset Accumulation is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 727.00 in Simt Multi Asset Accumulation on September 1, 2024 and sell it today you would earn a total of 20.00 from holding Simt Multi Asset Accumulation or generate 2.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
California Bond Fund vs. Simt Multi Asset Accumulation
Performance |
| Timeline |
| California Bond |
| Simt Multi Asset |
California Bond and Simt Multi-asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with California Bond and Simt Multi-asset
The main advantage of trading using opposite California Bond and Simt Multi-asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if California Bond position performs unexpectedly, Simt Multi-asset 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 Multi-asset will offset losses from the drop in Simt Multi-asset's long position.| California Bond vs. Income Fund Income | California Bond vs. Usaa Nasdaq 100 | California Bond vs. Intermediate Term Bond Fund | California Bond vs. Usaa Intermediate Term |
| Simt Multi-asset vs. Dunham Real Estate | Simt Multi-asset vs. Amg Managers Centersquare | Simt Multi-asset vs. Deutsche Real Estate | Simt Multi-asset vs. Great West Real Estate |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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