Correlation Between Simt Real and Mid Cap

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

By analyzing existing cross correlation between Simt Real Estate and Mid Cap 15x Strategy, you can compare the effects of market volatilities on Simt Real and Mid Cap 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 Real with a short position of Mid Cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simt Real and Mid Cap.

Diversification Opportunities for Simt Real and Mid Cap

0.53

Correlation Coefficient

Simt Real  Mid Cap

Very weak diversification

The 3 months correlation between Simt and Mid is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Simt Real Estate and Mid Cap 15x Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mid Cap 15x and Simt Real 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 Real Estate are associated (or correlated) with Mid Cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mid Cap 15x has no effect on the direction of Simt Real i.e., Simt Real and Mid Cap go up and down completely randomly.

Pair Corralation between Simt Real and Mid Cap

Assuming the 90 days horizon Simt Real Estate is expected to under-perform the Mid Cap. But the mutual fund apears to be less risky and, when comparing its historical volatility, Simt Real Estate is 1.47 times less risky than Mid Cap. The mutual fund trades about -0.13 of its potential returns per unit of risk. The Mid Cap 15x Strategy is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  13,340  in Mid Cap 15x Strategy on September 22, 2024 and sell it today you would lose (160.00) from holding Mid Cap 15x Strategy or give up 1.2% of portfolio value over 90 days.

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

Simt Real Estate  vs.  Mid Cap 15x Strategy

Simt Real Estate

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Simt Real Estate has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest unfluctuating performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Mid Cap 15x

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mid Cap 15x Strategy has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical indicators, Mid Cap 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 Real and Mid Cap

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

The idea behind Simt Real Estate and Mid Cap 15x Strategy 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.