Correlation Between Ab Select and Simt Global

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

By analyzing existing cross correlation between Ab Select Longshort and Simt Global Managed, you can compare the effects of market volatilities on Ab Select 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 Ab Select with a short position of Simt Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Select and Simt Global.

Diversification Opportunities for Ab Select and Simt Global

0.23

Correlation Coefficient

Ab Select  Simt Global

Modest diversification

The 3 months correlation between ASCLX and Simt is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Ab Select Longshort 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 Ab Select 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 Ab Select Longshort 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 Ab Select i.e., Ab Select and Simt Global go up and down completely randomly.

Pair Corralation between Ab Select and Simt Global

Assuming the 90 days horizon Ab Select Longshort is expected to under-perform the Simt Global. In addition to that, Ab Select is 1.05 times more volatile than Simt Global Managed. It trades about -0.01 of its total potential returns per unit of risk. Simt Global Managed is currently generating about 0.18 per unit of volatility. If you would invest  1,009  in Simt Global Managed on December 28, 2024 and sell it today you would earn a total of  59.00  from holding Simt Global Managed or generate 5.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.36%
Values	Daily Returns

Ab Select Longshort  vs.  Simt Global Managed

Ab Select Longshort

Risk-Adjusted Performance

Very Weak

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

Simt Global Managed

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Simt Global Managed are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Simt Global is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Ab Select and Simt Global

The main advantage of trading using opposite Ab Select and Simt Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Select 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.

The idea behind Ab Select Longshort and Simt Global Managed 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.