Correlation Between Simt Us and Hartford Schroders

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

By analyzing existing cross correlation between Simt Managed Volatility and Hartford Schroders Smallmid, you can compare the effects of market volatilities on Simt Us and Hartford Schroders 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 Us with a short position of Hartford Schroders. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simt Us and Hartford Schroders.

Diversification Opportunities for Simt Us and Hartford Schroders

0.88

Correlation Coefficient

Simt Us  Hartford Schroders

Very poor diversification

The 3 months correlation between Simt and Hartford is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Simt Managed Volatility and Hartford Schroders Smallmid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Schroders and Simt Us 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 Managed Volatility are associated (or correlated) with Hartford Schroders. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Schroders has no effect on the direction of Simt Us i.e., Simt Us and Hartford Schroders go up and down completely randomly.

Pair Corralation between Simt Us and Hartford Schroders

Assuming the 90 days horizon Simt Us is expected to generate 1.3 times less return on investment than Hartford Schroders. But when comparing it to its historical volatility, Simt Managed Volatility is 1.29 times less risky than Hartford Schroders. It trades about 0.19 of its potential returns per unit of risk. Hartford Schroders Smallmid is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  1,932  in Hartford Schroders Smallmid on October 20, 2024 and sell it today you would earn a total of  54.00  from holding Hartford Schroders Smallmid or generate 2.8% return on investment over 90 days.

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

Simt Managed Volatility  vs.  Hartford Schroders Smallmid

Simt Managed Volatility

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Simt Managed Volatility 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 February 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Hartford Schroders

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hartford Schroders Smallmid has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Hartford Schroders 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 Us and Hartford Schroders

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

The idea behind Simt Managed Volatility and Hartford Schroders Smallmid 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.