Correlation Between Simt Large and Swan Defined

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

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

Diversification Opportunities for Simt Large and Swan Defined

0.99

Correlation Coefficient

Simt Large  Swan Defined

No risk reduction

The 3 months correlation between Simt and Swan is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Simt Large Cap and Swan Defined Risk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swan Defined Risk and Simt Large 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 Large Cap are associated (or correlated) with Swan Defined. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swan Defined Risk has no effect on the direction of Simt Large i.e., Simt Large and Swan Defined go up and down completely randomly.

Pair Corralation between Simt Large and Swan Defined

Assuming the 90 days horizon Simt Large Cap is expected to generate 2.05 times more return on investment than Swan Defined. However, Simt Large is 2.05 times more volatile than Swan Defined Risk. It trades about 0.23 of its potential returns per unit of risk. Swan Defined Risk is currently generating about 0.23 per unit of risk. If you would invest  4,410  in Simt Large Cap on May 25, 2025 and sell it today you would earn a total of  465.00  from holding Simt Large Cap or generate 10.54% return on investment over 90 days.

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

Simt Large Cap  vs.  Swan Defined Risk

Simt Large Cap

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Simt Large Cap are ranked lower than 18 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Simt Large may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Swan Defined Risk

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Swan Defined Risk are ranked lower than 18 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Swan Defined 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 Large and Swan Defined

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

The idea behind Simt Large Cap and Swan Defined Risk 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.