Correlation Between Simt Small and Simt Multi

Can any of the company-specific risk be diversified away by investing in both Simt Small and Simt Multi 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 Simt Multi 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 Simt Multi Asset Accumulation, you can compare the effects of market volatilities on Simt Small and Simt Multi 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 Simt Multi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simt Small and Simt Multi.

Diversification Opportunities for Simt Small and Simt Multi

0.91

Correlation Coefficient

Simt Small  Simt Multi

Almost no diversification

The 3 months correlation between Simt and Simt is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Simt Small Cap and Simt Multi Asset Accumulation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simt Multi Asset 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 Simt Multi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simt Multi Asset has no effect on the direction of Simt Small i.e., Simt Small and Simt Multi go up and down completely randomly.

Pair Corralation between Simt Small and Simt Multi

Assuming the 90 days horizon Simt Small Cap is expected to generate 2.67 times more return on investment than Simt Multi. However, Simt Small is 2.67 times more volatile than Simt Multi Asset Accumulation. It trades about 0.19 of its potential returns per unit of risk. Simt Multi Asset Accumulation is currently generating about 0.28 per unit of risk. If you would invest  3,070  in Simt Small Cap on April 23, 2025 and sell it today you would earn a total of  379.00  from holding Simt Small Cap or generate 12.35% return on investment over 90 days.

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

Simt Small Cap  vs.  Simt Multi Asset Accumulation

Simt Small Cap

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Simt Small Cap are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Simt Small may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Simt Multi Asset

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Simt Multi Asset Accumulation are ranked lower than 21 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Simt Multi may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Simt Small and Simt Multi

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

The idea behind Simt Small Cap and Simt Multi Asset Accumulation 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.

Check out your portfolio center.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.