Correlation Between Simt Real and Stet Short

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

By analyzing existing cross correlation between Simt Real Return and Stet Short Duration, you can compare the effects of market volatilities on Simt Real and Stet Short 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 Stet Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simt Real and Stet Short.

Diversification Opportunities for Simt Real and Stet Short

0.3

Correlation Coefficient

Simt Real  Stet Short

Weak diversification

The 3 months correlation between Simt and Stet is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Simt Real Return and Stet Short Duration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stet Short Duration 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 Return are associated (or correlated) with Stet Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stet Short Duration has no effect on the direction of Simt Real i.e., Simt Real and Stet Short go up and down completely randomly.

Pair Corralation between Simt Real and Stet Short

Assuming the 90 days horizon Simt Real Return is expected to under-perform the Stet Short. In addition to that, Simt Real is 1.71 times more volatile than Stet Short Duration. It trades about -0.1 of its total potential returns per unit of risk. Stet Short Duration is currently generating about 0.02 per unit of volatility. If you would invest  996.00  in Stet Short Duration on September 20, 2024 and sell it today you would earn a total of  1.00  from holding Stet Short Duration or generate 0.1% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Simt Real Return  vs.  Stet Short Duration

Simt Real Return

Risk-Adjusted Performance

0 of 100

Very Weak

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

Stet Short Duration

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Stet Short Duration are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Stet Short 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 Stet Short

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

The idea behind Simt Real Return and Stet Short Duration 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.

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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.