Correlation Between Small Company and Simt Small
Can any of the company-specific risk be diversified away by investing in both Small Company and Simt Small 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 Small Company and Simt Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Small Pany Growth and Simt Small Cap, you can compare the effects of market volatilities on Small Company and Simt Small 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 Small Company with a short position of Simt Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Small Company and Simt Small.
Diversification Opportunities for Small Company and Simt Small
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Small and Simt is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Small Pany Growth and Simt Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simt Small Cap and Small Company 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 Small Pany Growth are associated (or correlated) with Simt Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simt Small Cap has no effect on the direction of Small Company i.e., Small Company and Simt Small go up and down completely randomly.
Pair Corralation between Small Company and Simt Small
Assuming the 90 days horizon Small Pany Growth is expected to generate 1.55 times more return on investment than Simt Small. However, Small Company is 1.55 times more volatile than Simt Small Cap. It trades about 0.08 of its potential returns per unit of risk. Simt Small Cap is currently generating about 0.05 per unit of risk. If you would invest 915.00 in Small Pany Growth on December 3, 2024 and sell it today you would earn a total of 537.00 from holding Small Pany Growth or generate 58.69% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Small Pany Growth vs. Simt Small Cap
Performance |
Timeline |
Small Pany Growth |
Simt Small Cap |
Small Company and Simt Small Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Small Company and Simt Small
The main advantage of trading using opposite Small Company and Simt Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Small Company position performs unexpectedly, Simt Small 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 Small will offset losses from the drop in Simt Small's long position.Small Company vs. Mid Cap Growth | Small Company vs. Growth Portfolio Class | Small Company vs. Morgan Stanley Multi | Small Company vs. Emerging Markets Portfolio |
Simt Small vs. Maryland Short Term Tax Free | Simt Small vs. Shelton Emerging Markets | Simt Small vs. Jhancock Diversified Macro | Simt Small vs. Calvert Developed Market |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
Analyst Advice Analyst recommendations and target price estimates broken down by several categories |