Correlation Between Simt Mid and Saat Market

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

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

Diversification Opportunities for Simt Mid and Saat Market

0.7

Correlation Coefficient

Simt Mid  Saat Market

Poor diversification

The 3 months correlation between Simt and Saat is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Simt Mid Cap and Saat Market Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saat Market Growth and Simt Mid 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 Mid Cap are associated (or correlated) with Saat Market. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saat Market Growth has no effect on the direction of Simt Mid i.e., Simt Mid and Saat Market go up and down completely randomly.

Pair Corralation between Simt Mid and Saat Market

Assuming the 90 days horizon Simt Mid Cap is expected to generate 1.92 times more return on investment than Saat Market. However, Simt Mid is 1.92 times more volatile than Saat Market Growth. It trades about 0.08 of its potential returns per unit of risk. Saat Market Growth is currently generating about 0.1 per unit of risk. If you would invest  2,440  in Simt Mid Cap on September 16, 2024 and sell it today you would earn a total of  928.00  from holding Simt Mid Cap or generate 38.03% return on investment over 90 days.

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

Simt Mid Cap  vs.  Saat Market Growth

Simt Mid Cap

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Simt Mid Cap are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Simt Mid is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Saat Market Growth

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Saat Market Growth are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Saat Market 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 Mid and Saat Market

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

The idea behind Simt Mid Cap and Saat Market Growth 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.