Correlation Between Saat Defensive and Simt Core

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

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

Diversification Opportunities for Saat Defensive and Simt Core

0.57

Correlation Coefficient

Saat Defensive  Simt Core

Very weak diversification

The 3 months correlation between Saat and Simt is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Saat Defensive Strategy and Simt E Fixed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simt E Fixed and Saat Defensive 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 Defensive Strategy are associated (or correlated) with Simt Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simt E Fixed has no effect on the direction of Saat Defensive i.e., Saat Defensive and Simt Core go up and down completely randomly.

Pair Corralation between Saat Defensive and Simt Core

Assuming the 90 days horizon Saat Defensive Strategy is expected to generate 0.17 times more return on investment than Simt Core. However, Saat Defensive Strategy is 6.04 times less risky than Simt Core. It trades about 0.5 of its potential returns per unit of risk. Simt E Fixed is currently generating about 0.01 per unit of risk. If you would invest  1,102  in Saat Defensive Strategy on May 1, 2025 and sell it today you would earn a total of  18.00  from holding Saat Defensive Strategy or generate 1.63% return on investment over 90 days.

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

Saat Defensive Strategy  vs.  Simt E Fixed

Saat Defensive Strategy

Risk-Adjusted Performance

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Saat Defensive Strategy are ranked lower than 39 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Saat Defensive is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Simt E Fixed

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Saat Defensive and Simt Core

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

The idea behind Saat Defensive Strategy and Simt E Fixed 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.