Correlation Between Simt Multi and Cref Inflation

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

By analyzing existing cross correlation between Simt Multi Asset Inflation and Cref Inflation Linked Bond, you can compare the effects of market volatilities on Simt Multi and Cref Inflation 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 with a short position of Cref Inflation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simt Multi and Cref Inflation.

Diversification Opportunities for Simt Multi and Cref Inflation

0.61

Correlation Coefficient

Simt Multi  Cref Inflation

Poor diversification

The 3 months correlation between Simt and Cref is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Simt Multi Asset Inflation and Cref Inflation Linked Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cref Inflation Linked and Simt Multi 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 Inflation are associated (or correlated) with Cref Inflation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cref Inflation Linked has no effect on the direction of Simt Multi i.e., Simt Multi and Cref Inflation go up and down completely randomly.

Pair Corralation between Simt Multi and Cref Inflation

Assuming the 90 days horizon Simt Multi is expected to generate 1.97 times less return on investment than Cref Inflation. In addition to that, Simt Multi is 1.25 times more volatile than Cref Inflation Linked Bond. It trades about 0.03 of its total potential returns per unit of risk. Cref Inflation Linked Bond is currently generating about 0.07 per unit of volatility. If you would invest  8,851  in Cref Inflation Linked Bond on April 30, 2025 and sell it today you would earn a total of  67.00  from holding Cref Inflation Linked Bond or generate 0.76% return on investment over 90 days.

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

Simt Multi Asset Inflation  vs.  Cref Inflation Linked Bond

Simt Multi Asset

Risk-Adjusted Performance

Weak

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

Cref Inflation Linked

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Cref Inflation Linked Bond are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Cref Inflation 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 Multi and Cref Inflation

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

The idea behind Simt Multi Asset Inflation and Cref Inflation Linked Bond 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.