Correlation Between Nova Fund and Simt Multi

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

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

Diversification Opportunities for Nova Fund and Simt Multi

0.4

Correlation Coefficient

Nova Fund  Simt Multi

Very weak diversification

The 3 months correlation between Nova and Simt is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Nova Fund Class and Simt Multi Asset Inflation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simt Multi Asset and Nova Fund 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 Nova Fund Class are associated (or correlated) with Simt Multi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simt Multi Asset has no effect on the direction of Nova Fund i.e., Nova Fund and Simt Multi go up and down completely randomly.

Pair Corralation between Nova Fund and Simt Multi

Assuming the 90 days horizon Nova Fund Class is expected to generate 3.94 times more return on investment than Simt Multi. However, Nova Fund is 3.94 times more volatile than Simt Multi Asset Inflation. It trades about 0.27 of its potential returns per unit of risk. Simt Multi Asset Inflation is currently generating about 0.05 per unit of risk. If you would invest  12,078  in Nova Fund Class on May 3, 2025 and sell it today you would earn a total of  2,269  from holding Nova Fund Class or generate 18.79% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.39%
Values	Daily Returns

Nova Fund Class  vs.  Simt Multi Asset Inflation

Nova Fund Class

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Nova Fund Class are ranked lower than 21 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Nova Fund showed solid returns over the last few months and may actually be approaching a breakup point.

Simt Multi Asset

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Simt Multi Asset Inflation are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Simt Multi is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Nova Fund and Simt Multi

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

The idea behind Nova Fund Class and Simt Multi Asset Inflation 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.