Correlation Between Walden Asset and Simt Tax

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

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

Diversification Opportunities for Walden Asset and Simt Tax

0.62

Correlation Coefficient

Walden Asset  Simt Tax

Poor diversification

The 3 months correlation between Walden and Simt is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Walden Asset Management and Simt Tax Managed Managed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simt Tax Managed and Walden Asset 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 Walden Asset Management are associated (or correlated) with Simt Tax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simt Tax Managed has no effect on the direction of Walden Asset i.e., Walden Asset and Simt Tax go up and down completely randomly.

Pair Corralation between Walden Asset and Simt Tax

Assuming the 90 days horizon Walden Asset Management is expected to generate 0.31 times more return on investment than Simt Tax. However, Walden Asset Management is 3.22 times less risky than Simt Tax. It trades about -0.08 of its potential returns per unit of risk. Simt Tax Managed Managed is currently generating about -0.12 per unit of risk. If you would invest  2,359  in Walden Asset Management on September 19, 2024 and sell it today you would lose (86.00) from holding Walden Asset Management or give up 3.65% of portfolio value over 90 days.

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

Walden Asset Management  vs.  Simt Tax Managed Managed

Walden Asset Management

Risk-Adjusted Performance

0 of 100

Very Weak

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

Simt Tax Managed

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Simt Tax Managed Managed 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.

Pair Trading with Walden Asset and Simt Tax

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

The idea behind Walden Asset Management and Simt Tax Managed Managed 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .