Correlation Between Walden Asset and Simt Large
Can any of the company-specific risk be diversified away by investing in both Walden Asset and Simt Large 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 Walden Asset and Simt Large into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walden Asset Management and Simt Large Cap, you can compare the effects of market volatilities on Walden Asset and Simt Large 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 Walden Asset with a short position of Simt Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walden Asset and Simt Large.
Diversification Opportunities for Walden Asset and Simt Large
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Walden and Simt is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Walden Asset Management and Simt Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simt Large Cap and Walden Asset 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 Walden Asset Management are associated (or correlated) with Simt Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simt Large Cap has no effect on the direction of Walden Asset i.e., Walden Asset and Simt Large go up and down completely randomly.
Pair Corralation between Walden Asset and Simt Large
Assuming the 90 days horizon Walden Asset is expected to generate 6.21 times less return on investment than Simt Large. But when comparing it to its historical volatility, Walden Asset Management is 1.09 times less risky than Simt Large. It trades about 0.02 of its potential returns per unit of risk. Simt Large Cap is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 2,381 in Simt Large Cap on September 14, 2024 and sell it today you would earn a total of 422.00 from holding Simt Large Cap or generate 17.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.63% |
| Values | Daily Returns |
Walden Asset Management vs. Simt Large Cap
Performance |
| Timeline |
| Walden Asset Management |
| Simt Large Cap |
Walden Asset and Simt Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walden Asset and Simt Large
The main advantage of trading using opposite Walden Asset and Simt Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walden Asset position performs unexpectedly, Simt Large 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 Large will offset losses from the drop in Simt Large's long position.| Walden Asset vs. Walden Equity Fund | Walden Asset vs. Boston Trust Asset | Walden Asset vs. Ab Centrated Growth | Walden Asset vs. Boston Trust Midcap |
| Simt Large vs. Simt Managed Volatility | Simt Large vs. Simt Tax Managed Managed | Simt Large vs. Virtus Kar Small Cap | Simt Large vs. Walden Asset Management |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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