Correlation Between Lsv Small and Simt Dynamic

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

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

Diversification Opportunities for Lsv Small and Simt Dynamic

0.9

Correlation Coefficient

Lsv Small  Simt Dynamic

Almost no diversification

The 3 months correlation between Lsv and Simt is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Lsv Small Cap and Simt Dynamic Asset in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simt Dynamic Asset and Lsv Small 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 Lsv Small Cap are associated (or correlated) with Simt Dynamic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simt Dynamic Asset has no effect on the direction of Lsv Small i.e., Lsv Small and Simt Dynamic go up and down completely randomly.

Pair Corralation between Lsv Small and Simt Dynamic

Assuming the 90 days horizon Lsv Small is expected to generate 1.49 times less return on investment than Simt Dynamic. In addition to that, Lsv Small is 1.67 times more volatile than Simt Dynamic Asset. It trades about 0.09 of its total potential returns per unit of risk. Simt Dynamic Asset is currently generating about 0.21 per unit of volatility. If you would invest  1,708  in Simt Dynamic Asset on May 20, 2025 and sell it today you would earn a total of  153.00  from holding Simt Dynamic Asset or generate 8.96% return on investment over 90 days.

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

Lsv Small Cap  vs.  Simt Dynamic Asset

Lsv Small Cap

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Lsv Small Cap are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Lsv Small is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Simt Dynamic Asset

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Simt Dynamic Asset are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Simt Dynamic may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Lsv Small and Simt Dynamic

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

The idea behind Lsv Small Cap and Simt Dynamic Asset 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.