Correlation Between Simt Core and Sdit Short

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

By analyzing existing cross correlation between Simt E Fixed and Sdit Short Duration, you can compare the effects of market volatilities on Simt Core and Sdit Short 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 Core with a short position of Sdit Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simt Core and Sdit Short.

Diversification Opportunities for Simt Core and Sdit Short

0.81

Correlation Coefficient

Simt Core  Sdit Short

Very poor diversification

The 3 months correlation between Simt and Sdit is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Simt E Fixed and Sdit Short Duration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sdit Short Duration and Simt Core 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 E Fixed are associated (or correlated) with Sdit Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sdit Short Duration has no effect on the direction of Simt Core i.e., Simt Core and Sdit Short go up and down completely randomly.

Pair Corralation between Simt Core and Sdit Short

Assuming the 90 days horizon Simt E Fixed is expected to generate 2.31 times more return on investment than Sdit Short. However, Simt Core is 2.31 times more volatile than Sdit Short Duration. It trades about 0.07 of its potential returns per unit of risk. Sdit Short Duration is currently generating about 0.12 per unit of risk. If you would invest  941.00  in Simt E Fixed on April 24, 2025 and sell it today you would earn a total of  13.00  from holding Simt E Fixed or generate 1.38% return on investment over 90 days.

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

Simt E Fixed  vs.  Sdit Short Duration

Simt E Fixed

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Simt E Fixed are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Simt Core is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Sdit Short Duration

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sdit Short Duration are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Sdit Short 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 Core and Sdit Short

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

The idea behind Simt E Fixed and Sdit Short Duration 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.