Correlation Between Simt Multi-asset and Simt Mid

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

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

Diversification Opportunities for Simt Multi-asset and Simt Mid

0.41

Correlation Coefficient

Simt Multi-asset  Simt Mid

Very weak diversification

The 3 months correlation between Simt and Simt is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Simt Multi Asset Accumulation and Simt Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simt Mid Cap and Simt Multi-asset 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 Multi Asset Accumulation are associated (or correlated) with Simt Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simt Mid Cap has no effect on the direction of Simt Multi-asset i.e., Simt Multi-asset and Simt Mid go up and down completely randomly.

Pair Corralation between Simt Multi-asset and Simt Mid

Assuming the 90 days horizon Simt Multi Asset Accumulation is expected to generate 0.4 times more return on investment than Simt Mid. However, Simt Multi Asset Accumulation is 2.5 times less risky than Simt Mid. It trades about 0.04 of its potential returns per unit of risk. Simt Mid Cap is currently generating about -0.16 per unit of risk. If you would invest  731.00  in Simt Multi Asset Accumulation on December 1, 2024 and sell it today you would earn a total of  8.00  from holding Simt Multi Asset Accumulation or generate 1.09% return on investment over 90 days.

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

Simt Multi Asset Accumulation  vs.  Simt Mid Cap

Simt Multi Asset

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Simt Multi Asset Accumulation are ranked lower than 2 (%) 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.

Simt Mid Cap

Risk-Adjusted Performance

Very Weak

Over the last 90 days Simt Mid Cap 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 forward 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.

Pair Trading with Simt Multi-asset and Simt Mid

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

The idea behind Simt Multi Asset Accumulation and Simt Mid Cap 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..