Correlation Between Simt Multi-asset and Sit Emerging

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

By analyzing existing cross correlation between Simt Multi Asset Accumulation and Sit Emerging Markets, you can compare the effects of market volatilities on Simt Multi-asset and Sit Emerging 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 Sit Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simt Multi-asset and Sit Emerging.

Diversification Opportunities for Simt Multi-asset and Sit Emerging

0.64

Correlation Coefficient

Simt Multi-asset  Sit Emerging

Poor diversification

The 3 months correlation between Simt and Sit is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Simt Multi Asset Accumulation and Sit Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sit Emerging Markets 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 Accumulation are associated (or correlated) with Sit Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sit Emerging Markets has no effect on the direction of Simt Multi-asset i.e., Simt Multi-asset and Sit Emerging go up and down completely randomly.

Pair Corralation between Simt Multi-asset and Sit Emerging

Assuming the 90 days horizon Simt Multi Asset Accumulation is expected to under-perform the Sit Emerging. But the mutual fund apears to be less risky and, when comparing its historical volatility, Simt Multi Asset Accumulation is 1.77 times less risky than Sit Emerging. The mutual fund trades about -0.1 of its potential returns per unit of risk. The Sit Emerging Markets is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  1,102  in Sit Emerging Markets on February 4, 2024 and sell it today you would earn a total of  20.00  from holding Sit Emerging Markets or generate 1.81% 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 Accumulation  vs.  Sit Emerging Markets

Simt Multi Asset

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Simt Multi Asset Accumulation are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Simt Multi-asset is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Sit Emerging Markets

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sit Emerging Markets are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Sit Emerging may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Pair Trading with Simt Multi-asset and Sit Emerging

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

The idea behind Simt Multi Asset Accumulation and Sit Emerging Markets 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 Commodity Directory module to find actively traded commodities issued by global exchanges.