Correlation Between Siit E and Simt Core

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

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

Diversification Opportunities for Siit E and Simt Core

1.0

Correlation Coefficient

Siit E  Simt Core

No risk reduction

The 3 months correlation between Siit and Simt is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Siit E Fixed and Simt E Fixed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simt E Fixed and Siit E 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 Siit E Fixed are associated (or correlated) with Simt Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simt E Fixed has no effect on the direction of Siit E i.e., Siit E and Simt Core go up and down completely randomly.

Pair Corralation between Siit E and Simt Core

Assuming the 90 days horizon Siit E is expected to generate 1.01 times less return on investment than Simt Core. But when comparing it to its historical volatility, Siit E Fixed is 1.06 times less risky than Simt Core. It trades about 0.07 of its potential returns per unit of risk. Simt E Fixed is currently generating about 0.07 of returns per unit of risk over similar time horizon. 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	Very Strong
Accuracy	100.0%
Values	Daily Returns

Siit E Fixed  vs.  Simt E Fixed

Siit E Fixed

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Siit 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, Siit E is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Simt E Fixed

Risk-Adjusted Performance

Modest

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.

Pair Trading with Siit E and Simt Core

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

The idea behind Siit E Fixed and Simt E Fixed 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.