Correlation Between Dana Large and Simt Multi-asset

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

By analyzing existing cross correlation between Dana Large Cap and Simt Multi Asset Inflation, you can compare the effects of market volatilities on Dana Large and Simt Multi-asset 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 Dana Large with a short position of Simt Multi-asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dana Large and Simt Multi-asset.

Diversification Opportunities for Dana Large and Simt Multi-asset

-0.66

Correlation Coefficient

Dana Large  Simt Multi-asset

Excellent diversification

The 3 months correlation between Dana and Simt is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Dana Large Cap and Simt Multi Asset Inflation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simt Multi Asset and Dana Large 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 Dana Large Cap are associated (or correlated) with Simt Multi-asset. 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 Dana Large i.e., Dana Large and Simt Multi-asset go up and down completely randomly.

Pair Corralation between Dana Large and Simt Multi-asset

Assuming the 90 days horizon Dana Large Cap is expected to under-perform the Simt Multi-asset. In addition to that, Dana Large is 4.73 times more volatile than Simt Multi Asset Inflation. It trades about -0.07 of its total potential returns per unit of risk. Simt Multi Asset Inflation is currently generating about 0.43 per unit of volatility. If you would invest  763.00  in Simt Multi Asset Inflation on December 27, 2024 and sell it today you would earn a total of  44.00  from holding Simt Multi Asset Inflation or generate 5.77% return on investment over 90 days.

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

Dana Large Cap  vs.  Simt Multi Asset Inflation

Dana Large Cap

Risk-Adjusted Performance

Very Weak

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

Simt Multi Asset

Risk-Adjusted Performance

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Simt Multi Asset Inflation are ranked lower than 33 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Simt Multi-asset is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Dana Large and Simt Multi-asset

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

The idea behind Dana Large Cap and Simt Multi Asset Inflation 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.