Correlation Between Simt Sp and Siit Intermediate

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Can any of the company-specific risk be diversified away by investing in both Simt Sp and Siit Intermediate 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 Sp and Siit Intermediate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Simt Sp 500 and Siit Intermediate Duration, you can compare the effects of market volatilities on Simt Sp and Siit Intermediate 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 Sp with a short position of Siit Intermediate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simt Sp and Siit Intermediate.

Diversification Opportunities for Simt Sp and Siit Intermediate

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Simt and Siit is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Simt Sp 500 and Siit Intermediate Duration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siit Intermediate and Simt Sp 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 Sp 500 are associated (or correlated) with Siit Intermediate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siit Intermediate has no effect on the direction of Simt Sp i.e., Simt Sp and Siit Intermediate go up and down completely randomly.

Pair Corralation between Simt Sp and Siit Intermediate

If you would invest  0.00  in Simt Sp 500 on September 17, 2024 and sell it today you would earn a total of  0.00  from holding Simt Sp 500 or generate 0.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy1.56%
ValuesDaily Returns

Simt Sp 500  vs.  Siit Intermediate Duration

 Performance 
       Timeline  
Simt Sp 500 

Risk-Adjusted Performance

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Strong
Good
Over the last 90 days Simt Sp 500 has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Simt Sp is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Siit Intermediate 

Risk-Adjusted Performance

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

Simt Sp and Siit Intermediate Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Simt Sp and Siit Intermediate

The main advantage of trading using opposite Simt Sp and Siit Intermediate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simt Sp position performs unexpectedly, Siit Intermediate 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 Siit Intermediate will offset losses from the drop in Siit Intermediate's long position.
The idea behind Simt Sp 500 and Siit Intermediate Duration 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.

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