Correlation Between Simt Large and Saat Aggressive

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

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

Diversification Opportunities for Simt Large and Saat Aggressive

0.35

Correlation Coefficient

Simt Large  Saat Aggressive

Weak diversification

The 3 months correlation between Simt and Saat is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Simt Large Cap and Saat Aggressive Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saat Aggressive Strategy and Simt 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 Simt Large Cap are associated (or correlated) with Saat Aggressive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saat Aggressive Strategy has no effect on the direction of Simt Large i.e., Simt Large and Saat Aggressive go up and down completely randomly.

Pair Corralation between Simt Large and Saat Aggressive

Assuming the 90 days horizon Simt Large Cap is expected to under-perform the Saat Aggressive. In addition to that, Simt Large is 1.91 times more volatile than Saat Aggressive Strategy. It trades about -0.19 of its total potential returns per unit of risk. Saat Aggressive Strategy is currently generating about -0.04 per unit of volatility. If you would invest  1,449  in Saat Aggressive Strategy on December 1, 2024 and sell it today you would lose (8.00) from holding Saat Aggressive Strategy or give up 0.55% of portfolio value over 90 days.

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

Simt Large Cap  vs.  Saat Aggressive Strategy

Simt Large Cap

Risk-Adjusted Performance

Very Weak

Over the last 90 days Simt Large 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 fundamental 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.

Saat Aggressive Strategy

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Simt Large and Saat Aggressive

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

The idea behind Simt Large Cap and Saat Aggressive Strategy 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.