Correlation Between Siit World and Simt Multi-asset
Can any of the company-specific risk be diversified away by investing in both Siit World 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 Siit World 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 Siit World Equity and Simt Multi Asset Accumulation, you can compare the effects of market volatilities on Siit World 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 Siit World with a short position of Simt Multi-asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siit World and Simt Multi-asset.
Diversification Opportunities for Siit World and Simt Multi-asset
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Siit and Simt is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Siit World Equity 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 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 Equity 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 Siit World i.e., Siit World and Simt Multi-asset go up and down completely randomly.
Pair Corralation between Siit World and Simt Multi-asset
Assuming the 90 days horizon Siit World Equity is expected to generate 1.4 times more return on investment than Simt Multi-asset. However, Siit World is 1.4 times more volatile than Simt Multi Asset Accumulation. It trades about 0.06 of its potential returns per unit of risk. Simt Multi Asset Accumulation is currently generating about 0.04 per unit of risk. If you would invest 1,065 in Siit World Equity on September 3, 2024 and sell it today you would earn a total of 213.00 from holding Siit World Equity or generate 20.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Siit World Equity vs. Simt Multi Asset Accumulation
Performance |
| Timeline |
| Siit World Equity |
| Simt Multi Asset |
Siit World and Simt Multi-asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Siit World and Simt Multi-asset
The main advantage of trading using opposite Siit World and Simt Multi-asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siit World 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.| Siit World vs. Salient Mlp Energy | Siit World vs. Gmo Resources | Siit World vs. Jennison Natural Resources | Siit World vs. Franklin Natural Resources |
| Simt Multi-asset vs. Simt Mid Cap | Simt Multi-asset vs. Simt High Yield | Simt Multi-asset vs. Simt Real Return | Simt Multi-asset vs. Simt Small Cap |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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