Correlation Between Simt Multi-asset and Real Return
Can any of the company-specific risk be diversified away by investing in both Simt Multi-asset and Real Return 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 Real Return 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 Real Return Fund, you can compare the effects of market volatilities on Simt Multi-asset and Real Return 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 Real Return. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simt Multi-asset and Real Return.
Diversification Opportunities for Simt Multi-asset and Real Return
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Simt and Real is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Simt Multi Asset Inflation and Real Return Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Real Return Fund 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 Inflation are associated (or correlated) with Real Return. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Real Return Fund has no effect on the direction of Simt Multi-asset i.e., Simt Multi-asset and Real Return go up and down completely randomly.
Pair Corralation between Simt Multi-asset and Real Return
Assuming the 90 days horizon Simt Multi Asset Inflation is expected to generate 0.87 times more return on investment than Real Return. However, Simt Multi Asset Inflation is 1.15 times less risky than Real Return. It trades about 0.23 of its potential returns per unit of risk. Real Return Fund is currently generating about 0.08 per unit of risk. If you would invest 773.00 in Simt Multi Asset Inflation on December 3, 2024 and sell it today you would earn a total of 25.00 from holding Simt Multi Asset Inflation or generate 3.23% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Simt Multi Asset Inflation vs. Real Return Fund
Performance |
Timeline |
Simt Multi Asset |
Real Return Fund |
Simt Multi-asset and Real Return Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Simt Multi-asset and Real Return
The main advantage of trading using opposite Simt Multi-asset and Real Return positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simt Multi-asset position performs unexpectedly, Real Return 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 Real Return will offset losses from the drop in Real Return's long position.Simt Multi-asset vs. Diversified Real Asset | Simt Multi-asset vs. Western Asset Diversified | Simt Multi-asset vs. Fidelity Advisor Diversified | Simt Multi-asset vs. Elfun Diversified Fund |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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