Correlation Between Simt Multi-asset and Simt Small
Can any of the company-specific risk be diversified away by investing in both Simt Multi-asset and Simt Small 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 Multi-asset and Simt Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Simt Multi Asset Capital and Simt Small Cap, you can compare the effects of market volatilities on Simt Multi-asset and Simt Small 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 Multi-asset with a short position of Simt Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simt Multi-asset and Simt Small.
Diversification Opportunities for Simt Multi-asset and Simt Small
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Simt and Simt is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Simt Multi Asset Capital and Simt Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simt Small Cap and Simt Multi-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 Simt Multi Asset Capital are associated (or correlated) with Simt Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simt Small Cap has no effect on the direction of Simt Multi-asset i.e., Simt Multi-asset and Simt Small go up and down completely randomly.
Pair Corralation between Simt Multi-asset and Simt Small
Assuming the 90 days horizon Simt Multi-asset is expected to generate 5.39 times less return on investment than Simt Small. But when comparing it to its historical volatility, Simt Multi Asset Capital is 9.59 times less risky than Simt Small. It trades about 0.36 of its potential returns per unit of risk. Simt Small Cap is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 1,925 in Simt Small Cap on April 23, 2025 and sell it today you would earn a total of 296.00 from holding Simt Small Cap or generate 15.38% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Simt Multi Asset Capital vs. Simt Small Cap
Performance |
Timeline |
Simt Multi Asset |
Simt Small Cap |
Simt Multi-asset and Simt Small Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Simt Multi-asset and Simt Small
The main advantage of trading using opposite Simt Multi-asset and Simt Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simt Multi-asset position performs unexpectedly, Simt Small 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 Small will offset losses from the drop in Simt Small's long position.Simt Multi-asset vs. Elfun Diversified Fund | Simt Multi-asset vs. American Funds Conservative | Simt Multi-asset vs. Allianzgi Diversified Income | Simt Multi-asset vs. Putnam Diversified Income |
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Check out your portfolio center.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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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