Correlation Between Rational Strategic and Simt Multi-asset

Can any of the company-specific risk be diversified away by investing in both Rational Strategic 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 Rational Strategic 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 Rational Strategic Allocation and Simt Multi Asset Accumulation, you can compare the effects of market volatilities on Rational Strategic 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 Rational Strategic with a short position of Simt Multi-asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rational Strategic and Simt Multi-asset.

Diversification Opportunities for Rational Strategic and Simt Multi-asset

0.24

Correlation Coefficient

Rational Strategic  Simt Multi-asset

Modest diversification

The 3 months correlation between Rational and Simt is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Rational Strategic Allocation and Simt Multi Asset Accumulation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simt Multi Asset and Rational Strategic 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 Rational Strategic Allocation 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 Rational Strategic i.e., Rational Strategic and Simt Multi-asset go up and down completely randomly.

Pair Corralation between Rational Strategic and Simt Multi-asset

Assuming the 90 days horizon Rational Strategic Allocation is expected to under-perform the Simt Multi-asset. In addition to that, Rational Strategic is 3.81 times more volatile than Simt Multi Asset Accumulation. It trades about -0.11 of its total potential returns per unit of risk. Simt Multi Asset Accumulation is currently generating about 0.09 per unit of volatility. If you would invest  709.00  in Simt Multi Asset Accumulation on December 21, 2024 and sell it today you would earn a total of  19.00  from holding Simt Multi Asset Accumulation or generate 2.68% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.33%
Values	Daily Returns

Rational Strategic Allocation  vs.  Simt Multi Asset Accumulation

Rational Strategic

Risk-Adjusted Performance

Very Weak

Over the last 90 days Rational Strategic Allocation has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Simt Multi Asset

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Simt Multi Asset Accumulation are ranked lower than 7 (%) 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 Rational Strategic and Simt Multi-asset

The main advantage of trading using opposite Rational Strategic and Simt Multi-asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rational Strategic 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 Rational Strategic Allocation and Simt Multi Asset Accumulation 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.