Correlation Between Simt Tax-managed and Simt Multi-strategy

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

By analyzing existing cross correlation between Simt Tax Managed Smallmid and Simt Multi Strategy Alternative, you can compare the effects of market volatilities on Simt Tax-managed and Simt Multi-strategy 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 Tax-managed with a short position of Simt Multi-strategy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simt Tax-managed and Simt Multi-strategy.

Diversification Opportunities for Simt Tax-managed and Simt Multi-strategy

0.58

Correlation Coefficient

Simt Tax-managed  Simt Multi-strategy

Very weak diversification

The 3 months correlation between Simt and Simt is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Simt Tax Managed Smallmid and Simt Multi Strategy Alternativ in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simt Multi Strategy and Simt Tax-managed 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 Tax Managed Smallmid are associated (or correlated) with Simt Multi-strategy. 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 Strategy has no effect on the direction of Simt Tax-managed i.e., Simt Tax-managed and Simt Multi-strategy go up and down completely randomly.

Pair Corralation between Simt Tax-managed and Simt Multi-strategy

Assuming the 90 days horizon Simt Tax Managed Smallmid is expected to generate 3.91 times more return on investment than Simt Multi-strategy. However, Simt Tax-managed is 3.91 times more volatile than Simt Multi Strategy Alternative. It trades about 0.16 of its potential returns per unit of risk. Simt Multi Strategy Alternative is currently generating about 0.45 per unit of risk. If you would invest  2,090  in Simt Tax Managed Smallmid on April 24, 2025 and sell it today you would earn a total of  214.00  from holding Simt Tax Managed Smallmid or generate 10.24% return on investment over 90 days.

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

Simt Tax Managed Smallmid  vs.  Simt Multi Strategy Alternativ

Simt Tax Managed

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Simt Tax Managed Smallmid are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Simt Tax-managed may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Simt Multi Strategy

Risk-Adjusted Performance

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Simt Multi Strategy Alternative are ranked lower than 35 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Simt Multi-strategy may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Simt Tax-managed and Simt Multi-strategy

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

The idea behind Simt Tax Managed Smallmid and Simt Multi Strategy Alternative 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.