Correlation Between Simt Small and Utilities Fund

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

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

Diversification Opportunities for Simt Small and Utilities Fund

-0.21

Correlation Coefficient

Simt Small  Utilities Fund

Very good diversification

The 3 months correlation between Simt and Utilities is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Simt Small Cap and Utilities Fund Investor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Utilities Fund Investor and Simt Small 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 Small Cap are associated (or correlated) with Utilities Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Utilities Fund Investor has no effect on the direction of Simt Small i.e., Simt Small and Utilities Fund go up and down completely randomly.

Pair Corralation between Simt Small and Utilities Fund

Assuming the 90 days horizon Simt Small Cap is expected to generate 1.07 times more return on investment than Utilities Fund. However, Simt Small is 1.07 times more volatile than Utilities Fund Investor. It trades about -0.02 of its potential returns per unit of risk. Utilities Fund Investor is currently generating about -0.1 per unit of risk. If you would invest  2,395  in Simt Small Cap on September 24, 2025 and sell it today you would lose (54.00) from holding Simt Small Cap or give up 2.25% of portfolio value over 90 days.

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

Simt Small Cap  vs.  Utilities Fund Investor

Simt Small Cap

Risk-Adjusted Performance

Weakest

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

Utilities Fund Investor

Risk-Adjusted Performance

Weakest

Over the last 90 days Utilities Fund Investor has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's forward indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Simt Small and Utilities Fund

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

The idea behind Simt Small Cap and Utilities Fund Investor 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.