Correlation Between Energy Basic and Simt Multi-asset

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

By analyzing existing cross correlation between Energy Basic Materials and Simt Multi Asset Capital, you can compare the effects of market volatilities on Energy Basic and Simt Multi-asset 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 Energy Basic with a short position of Simt Multi-asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Energy Basic and Simt Multi-asset.

Diversification Opportunities for Energy Basic and Simt Multi-asset

0.89

Correlation Coefficient

Energy Basic  Simt Multi-asset

Very poor diversification

The 3 months correlation between Energy and Simt is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Energy Basic Materials and Simt Multi Asset Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simt Multi Asset and Energy Basic 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 Energy Basic Materials are associated (or correlated) with Simt Multi-asset. 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 Energy Basic i.e., Energy Basic and Simt Multi-asset go up and down completely randomly.

Pair Corralation between Energy Basic and Simt Multi-asset

Assuming the 90 days horizon Energy Basic Materials is expected to generate 8.33 times more return on investment than Simt Multi-asset. However, Energy Basic is 8.33 times more volatile than Simt Multi Asset Capital. It trades about 0.15 of its potential returns per unit of risk. Simt Multi Asset Capital is currently generating about 0.3 per unit of risk. If you would invest  1,214  in Energy Basic Materials on May 1, 2025 and sell it today you would earn a total of  104.00  from holding Energy Basic Materials or generate 8.57% return on investment over 90 days.

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

Energy Basic Materials  vs.  Simt Multi Asset Capital

Energy Basic Materials

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Energy Basic Materials are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Energy Basic may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Simt Multi Asset

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Simt Multi Asset Capital are ranked lower than 23 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Simt Multi-asset is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Energy Basic and Simt Multi-asset

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

The idea behind Energy Basic Materials and Simt Multi Asset Capital 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.