Correlation Between Simt Multi and Predex Funds

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Can any of the company-specific risk be diversified away by investing in both Simt Multi and Predex Funds 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 and Predex Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Simt Multi Asset Inflation and Predex Funds, you can compare the effects of market volatilities on Simt Multi and Predex Funds 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 with a short position of Predex Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simt Multi and Predex Funds.

Diversification Opportunities for Simt Multi and Predex Funds

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  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Simt and Predex is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Simt Multi Asset Inflation and Predex Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Predex Funds and Simt Multi 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 Inflation are associated (or correlated) with Predex Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Predex Funds has no effect on the direction of Simt Multi i.e., Simt Multi and Predex Funds go up and down completely randomly.

Pair Corralation between Simt Multi and Predex Funds

Assuming the 90 days horizon Simt Multi Asset Inflation is expected to generate 0.77 times more return on investment than Predex Funds. However, Simt Multi Asset Inflation is 1.3 times less risky than Predex Funds. It trades about 0.0 of its potential returns per unit of risk. Predex Funds is currently generating about -0.09 per unit of risk. If you would invest  769.00  in Simt Multi Asset Inflation on October 4, 2024 and sell it today you would lose (2.00) from holding Simt Multi Asset Inflation or give up 0.26% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy99.39%
ValuesDaily Returns

Simt Multi Asset Inflation  vs.  Predex Funds

 Performance 
       Timeline  
Simt Multi Asset 

Risk-Adjusted Performance

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Over the last 90 days Simt Multi Asset Inflation has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Simt Multi is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Predex Funds 

Risk-Adjusted Performance

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Weak
 
Strong
Very Weak
Over the last 90 days Predex Funds has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Predex Funds is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Simt Multi and Predex Funds Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Simt Multi and Predex Funds

The main advantage of trading using opposite Simt Multi and Predex Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simt Multi position performs unexpectedly, Predex Funds 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 Predex Funds will offset losses from the drop in Predex Funds' long position.
The idea behind Simt Multi Asset Inflation and Predex Funds 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.
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.

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