Correlation Between Simt Mid and Sextant International

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

By analyzing existing cross correlation between Simt Mid Cap and Sextant International Fund, you can compare the effects of market volatilities on Simt Mid and Sextant International 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 Mid with a short position of Sextant International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simt Mid and Sextant International.

Diversification Opportunities for Simt Mid and Sextant International

0.58

Correlation Coefficient

Simt Mid  Sextant International

Very weak diversification

The 3 months correlation between Simt and Sextant is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Simt Mid Cap and Sextant International Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sextant International and Simt Mid 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 Mid Cap are associated (or correlated) with Sextant International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sextant International has no effect on the direction of Simt Mid i.e., Simt Mid and Sextant International go up and down completely randomly.

Pair Corralation between Simt Mid and Sextant International

Assuming the 90 days horizon Simt Mid is expected to generate 1.29 times less return on investment than Sextant International. But when comparing it to its historical volatility, Simt Mid Cap is 1.4 times less risky than Sextant International. It trades about 0.07 of its potential returns per unit of risk. Sextant International Fund is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  1,542  in Sextant International Fund on October 6, 2025 and sell it today you would earn a total of  821.00  from holding Sextant International Fund or generate 53.24% return on investment over 90 days.

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

Simt Mid Cap  vs.  Sextant International Fund

Simt Mid Cap

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Simt Mid Cap are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Simt Mid is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Sextant International

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Sextant International Fund are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Sextant International showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Simt Mid and Sextant International

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

The idea behind Simt Mid Cap and Sextant International 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 Transaction History module to view history of all your transactions and understand their impact on performance.