Correlation Between Balanced Strategy and Simt High

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

By analyzing existing cross correlation between Balanced Strategy Fund and Simt High Yield, you can compare the effects of market volatilities on Balanced Strategy and Simt High 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 Balanced Strategy with a short position of Simt High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Balanced Strategy and Simt High.

Diversification Opportunities for Balanced Strategy and Simt High

0.94

Correlation Coefficient

Balanced Strategy  Simt High

Almost no diversification

The 3 months correlation between Balanced and Simt is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Balanced Strategy Fund and Simt High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simt High Yield and Balanced Strategy 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 Balanced Strategy Fund are associated (or correlated) with Simt High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simt High Yield has no effect on the direction of Balanced Strategy i.e., Balanced Strategy and Simt High go up and down completely randomly.

Pair Corralation between Balanced Strategy and Simt High

Assuming the 90 days horizon Balanced Strategy Fund is expected to generate 2.07 times more return on investment than Simt High. However, Balanced Strategy is 2.07 times more volatile than Simt High Yield. It trades about 0.18 of its potential returns per unit of risk. Simt High Yield is currently generating about 0.17 per unit of risk. If you would invest  1,073  in Balanced Strategy Fund on July 3, 2025 and sell it today you would earn a total of  45.00  from holding Balanced Strategy Fund or generate 4.19% return on investment over 90 days.

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

Balanced Strategy Fund  vs.  Simt High Yield

Balanced Strategy

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Balanced Strategy Fund are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Balanced Strategy is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Simt High Yield

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Simt High Yield are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Simt High is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Balanced Strategy and Simt High

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

The idea behind Balanced Strategy Fund and Simt High Yield 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.