Correlation Between Saat Moderate and Simt Mid

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

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

Diversification Opportunities for Saat Moderate and Simt Mid

0.94

Correlation Coefficient

Saat Moderate  Simt Mid

Almost no diversification

The 3 months correlation between Saat and Simt is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Saat Moderate Strategy and Simt Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simt Mid Cap and Saat Moderate 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 Saat Moderate Strategy are associated (or correlated) with Simt Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simt Mid Cap has no effect on the direction of Saat Moderate i.e., Saat Moderate and Simt Mid go up and down completely randomly.

Pair Corralation between Saat Moderate and Simt Mid

Assuming the 90 days horizon Saat Moderate is expected to generate 2.93 times less return on investment than Simt Mid. But when comparing it to its historical volatility, Saat Moderate Strategy is 3.41 times less risky than Simt Mid. It trades about 0.24 of its potential returns per unit of risk. Simt Mid Cap is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  2,845  in Simt Mid Cap on April 29, 2025 and sell it today you would earn a total of  308.00  from holding Simt Mid Cap or generate 10.83% return on investment over 90 days.

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

Saat Moderate Strategy  vs.  Simt Mid Cap

Saat Moderate Strategy

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Saat Moderate Strategy are ranked lower than 19 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Saat Moderate is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Simt Mid Cap

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Simt Mid Cap are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Simt Mid may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Saat Moderate and Simt Mid

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

The idea behind Saat Moderate Strategy and Simt Mid Cap 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.