Correlation Between Simt Global and Fam Equity-income

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

By analyzing existing cross correlation between Simt Global Managed and Fam Equity Income Fund, you can compare the effects of market volatilities on Simt Global and Fam Equity-income 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 Global with a short position of Fam Equity-income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simt Global and Fam Equity-income.

Diversification Opportunities for Simt Global and Fam Equity-income

0.39

Correlation Coefficient

Simt Global  Fam Equity-income

Weak diversification

The 3 months correlation between Simt and Fam is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Simt Global Managed and Fam Equity Income Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fam Equity Income and Simt Global 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 Global Managed are associated (or correlated) with Fam Equity-income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fam Equity Income has no effect on the direction of Simt Global i.e., Simt Global and Fam Equity-income go up and down completely randomly.

Pair Corralation between Simt Global and Fam Equity-income

Assuming the 90 days horizon Simt Global Managed is expected to generate 0.62 times more return on investment than Fam Equity-income. However, Simt Global Managed is 1.62 times less risky than Fam Equity-income. It trades about 0.01 of its potential returns per unit of risk. Fam Equity Income Fund is currently generating about -0.13 per unit of risk. If you would invest  1,130  in Simt Global Managed on August 25, 2025 and sell it today you would earn a total of  1.00  from holding Simt Global Managed or generate 0.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Simt Global Managed  vs.  Fam Equity Income Fund

Simt Global Managed

Risk-Adjusted Performance

Weakest

Over the last 90 days Simt Global Managed has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Simt Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Fam Equity Income

Risk-Adjusted Performance

Weakest

Over the last 90 days Fam Equity Income Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Fam Equity-income 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 Global and Fam Equity-income

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

The idea behind Simt Global Managed and Fam Equity Income Fund 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.