Correlation Between Simt Sp and Simt Global
Can any of the company-specific risk be diversified away by investing in both Simt Sp and Simt Global 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 Sp and Simt Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Simt Sp 500 and Simt Global Managed, you can compare the effects of market volatilities on Simt Sp and Simt Global 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 Sp with a short position of Simt Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simt Sp and Simt Global.
Diversification Opportunities for Simt Sp and Simt Global
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Simt and Simt is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Simt Sp 500 and Simt Global Managed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simt Global Managed and Simt Sp 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 Sp 500 are associated (or correlated) with Simt Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simt Global Managed has no effect on the direction of Simt Sp i.e., Simt Sp and Simt Global go up and down completely randomly.
Pair Corralation between Simt Sp and Simt Global
Assuming the 90 days horizon Simt Sp 500 is expected to generate 1.4 times more return on investment than Simt Global. However, Simt Sp is 1.4 times more volatile than Simt Global Managed. It trades about 0.33 of its potential returns per unit of risk. Simt Global Managed is currently generating about 0.18 per unit of risk. If you would invest 8,774 in Simt Sp 500 on April 24, 2025 and sell it today you would earn a total of 1,425 from holding Simt Sp 500 or generate 16.24% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Simt Sp 500 vs. Simt Global Managed
Performance |
Timeline |
Simt Sp 500 |
Simt Global Managed |
Simt Sp and Simt Global Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Simt Sp and Simt Global
The main advantage of trading using opposite Simt Sp and Simt Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simt Sp position performs unexpectedly, Simt Global 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 Global will offset losses from the drop in Simt Global's long position.Simt Sp vs. Simt Small Cap | Simt Sp vs. Simt Small Cap | Simt Sp vs. Simt Large Cap | Simt Sp vs. Sit International Equity |
Simt Global vs. Simt Multi Asset Income | Simt Global vs. Sit Emerging Markets | Simt Global vs. Simt E Fixed | Simt Global vs. Sit International Equity |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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