Correlation Between 1919 Financial and Simt Multi

Can any of the company-specific risk be diversified away by investing in both 1919 Financial and Simt Multi 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 1919 Financial and Simt Multi into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between 1919 Financial Services and Simt Multi Asset Inflation, you can compare the effects of market volatilities on 1919 Financial and Simt Multi 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 1919 Financial with a short position of Simt Multi. Check out your portfolio center. Please also check ongoing floating volatility patterns of 1919 Financial and Simt Multi.

Diversification Opportunities for 1919 Financial and Simt Multi

-0.06

Correlation Coefficient

1919 Financial  Simt Multi

Good diversification

The 3 months correlation between 1919 and Simt is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding 1919 Financial Services and Simt Multi Asset Inflation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simt Multi Asset and 1919 Financial 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 1919 Financial Services are associated (or correlated) with Simt Multi. 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 1919 Financial i.e., 1919 Financial and Simt Multi go up and down completely randomly.

Pair Corralation between 1919 Financial and Simt Multi

Assuming the 90 days horizon 1919 Financial Services is expected to generate 7.04 times more return on investment than Simt Multi. However, 1919 Financial is 7.04 times more volatile than Simt Multi Asset Inflation. It trades about -0.01 of its potential returns per unit of risk. Simt Multi Asset Inflation is currently generating about -0.13 per unit of risk. If you would invest  2,998  in 1919 Financial Services on September 28, 2024 and sell it today you would lose (71.00) from holding 1919 Financial Services or give up 2.37% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

1919 Financial Services  vs.  Simt Multi Asset Inflation

1919 Financial Services

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days 1919 Financial Services has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, 1919 Financial is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Simt Multi Asset

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Simt Multi Asset Inflation has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Simt Multi is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with 1919 Financial and Simt Multi

The main advantage of trading using opposite 1919 Financial and Simt Multi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 1919 Financial position performs unexpectedly, Simt Multi 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 will offset losses from the drop in Simt Multi's long position.

The idea behind 1919 Financial Services and Simt Multi Asset Inflation pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.