Correlation Between Westwood Largecap and Simt Multi-asset
Can any of the company-specific risk be diversified away by investing in both Westwood Largecap and Simt Multi-asset 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 Westwood Largecap and Simt Multi-asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Westwood Largecap Value and Simt Multi Asset Inflation, you can compare the effects of market volatilities on Westwood Largecap and Simt Multi-asset 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 Westwood Largecap with a short position of Simt Multi-asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westwood Largecap and Simt Multi-asset.
Diversification Opportunities for Westwood Largecap and Simt Multi-asset
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Westwood and Simt is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Westwood Largecap Value and Simt Multi Asset Inflation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simt Multi Asset and Westwood Largecap 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 Westwood Largecap Value are associated (or correlated) with Simt Multi-asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simt Multi Asset has no effect on the direction of Westwood Largecap i.e., Westwood Largecap and Simt Multi-asset go up and down completely randomly.
Pair Corralation between Westwood Largecap and Simt Multi-asset
Assuming the 90 days horizon Westwood Largecap Value is expected to under-perform the Simt Multi-asset. In addition to that, Westwood Largecap is 4.43 times more volatile than Simt Multi Asset Inflation. It trades about -0.11 of its total potential returns per unit of risk. Simt Multi Asset Inflation is currently generating about 0.23 per unit of volatility. 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 | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Westwood Largecap Value vs. Simt Multi Asset Inflation
Performance |
Timeline |
Westwood Largecap Value |
Simt Multi Asset |
Westwood Largecap and Simt Multi-asset Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Westwood Largecap and Simt Multi-asset
The main advantage of trading using opposite Westwood Largecap and Simt Multi-asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westwood Largecap position performs unexpectedly, Simt Multi-asset 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 Simt Multi-asset will offset losses from the drop in Simt Multi-asset's long position.Westwood Largecap vs. T Rowe Price | Westwood Largecap vs. Blackrock Global Longshort | Westwood Largecap vs. Cmg Ultra Short | Westwood Largecap vs. John Hancock Variable |
Simt Multi-asset vs. Asg Managed Futures | Simt Multi-asset vs. Nationwide Inflation Protected Securities | Simt Multi-asset vs. Ab Bond Inflation | Simt Multi-asset vs. Western Asset Inflation |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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