Correlation Between Simt Core and Simt Multi-strategy

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

By analyzing existing cross correlation between Simt E Fixed and Simt Multi Strategy Alternative, you can compare the effects of market volatilities on Simt Core and Simt Multi-strategy 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 Core with a short position of Simt Multi-strategy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simt Core and Simt Multi-strategy.

Diversification Opportunities for Simt Core and Simt Multi-strategy

-0.59

Correlation Coefficient

Simt Core  Simt Multi-strategy

Excellent diversification

The 3 months correlation between Simt and Simt is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Simt E Fixed and Simt Multi Strategy Alternativ in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simt Multi Strategy and Simt Core 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 E Fixed are associated (or correlated) with Simt Multi-strategy. 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 Strategy has no effect on the direction of Simt Core i.e., Simt Core and Simt Multi-strategy go up and down completely randomly.

Pair Corralation between Simt Core and Simt Multi-strategy

Assuming the 90 days horizon Simt Core is expected to generate 2.82 times less return on investment than Simt Multi-strategy. In addition to that, Simt Core is 1.31 times more volatile than Simt Multi Strategy Alternative. It trades about 0.11 of its total potential returns per unit of risk. Simt Multi Strategy Alternative is currently generating about 0.39 per unit of volatility. If you would invest  993.00  in Simt Multi Strategy Alternative on September 4, 2024 and sell it today you would earn a total of  21.00  from holding Simt Multi Strategy Alternative or generate 2.11% return on investment over 90 days.

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

Simt E Fixed  vs.  Simt Multi Strategy Alternativ

Simt E Fixed

Risk-Adjusted Performance

0 of 100

Very Weak

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

Simt Multi Strategy

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Simt Multi Strategy Alternative are ranked lower than 21 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Simt Multi-strategy is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Simt Core and Simt Multi-strategy

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

The idea behind Simt E Fixed and Simt Multi Strategy Alternative 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.