Correlation Between Simt Tax and Catholic Values

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

By analyzing existing cross correlation between Simt Tax Managed Smallmid and Catholic Values Fixed, you can compare the effects of market volatilities on Simt Tax and Catholic Values 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 Tax with a short position of Catholic Values. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simt Tax and Catholic Values.

Diversification Opportunities for Simt Tax and Catholic Values

-0.51

Correlation Coefficient

Simt Tax  Catholic Values

Excellent diversification

The 3 months correlation between Simt and Catholic is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Simt Tax Managed Smallmid and Catholic Values Fixed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catholic Values Fixed and Simt Tax 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 Tax Managed Smallmid are associated (or correlated) with Catholic Values. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catholic Values Fixed has no effect on the direction of Simt Tax i.e., Simt Tax and Catholic Values go up and down completely randomly.

Pair Corralation between Simt Tax and Catholic Values

Assuming the 90 days horizon Simt Tax Managed Smallmid is expected to under-perform the Catholic Values. In addition to that, Simt Tax is 8.36 times more volatile than Catholic Values Fixed. It trades about -0.1 of its total potential returns per unit of risk. Catholic Values Fixed is currently generating about -0.16 per unit of volatility. If you would invest  889.00  in Catholic Values Fixed on September 19, 2024 and sell it today you would lose (28.00) from holding Catholic Values Fixed or give up 3.15% of portfolio value over 90 days.

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

Simt Tax Managed Smallmid  vs.  Catholic Values Fixed

Simt Tax Managed

Risk-Adjusted Performance

0 of 100

Modest

Over the last 90 days Simt Tax Managed Smallmid has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Catholic Values Fixed

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Catholic Values Fixed has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Catholic Values 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 Tax and Catholic Values

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

The idea behind Simt Tax Managed Smallmid and Catholic Values Fixed 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.