Correlation Between Stet California and Simt Global
Can any of the company-specific risk be diversified away by investing in both Stet California and Simt Global 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 Stet California and Simt Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stet California Municipal and Simt Global Managed, you can compare the effects of market volatilities on Stet California and Simt Global 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 Stet California with a short position of Simt Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stet California and Simt Global.
Diversification Opportunities for Stet California and Simt Global
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Stet and Simt is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Stet California Municipal and Simt Global Managed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simt Global Managed and Stet California 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 Stet California Municipal are associated (or correlated) with Simt Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simt Global Managed has no effect on the direction of Stet California i.e., Stet California and Simt Global go up and down completely randomly.
Pair Corralation between Stet California and Simt Global
Assuming the 90 days horizon Stet California is expected to generate 1.04 times less return on investment than Simt Global. But when comparing it to its historical volatility, Stet California Municipal is 4.22 times less risky than Simt Global. It trades about 0.34 of its potential returns per unit of risk. Simt Global Managed is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,109 in Simt Global Managed on May 27, 2025 and sell it today you would earn a total of 26.00 from holding Simt Global Managed or generate 2.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stet California Municipal vs. Simt Global Managed
Performance |
| Timeline |
| Stet California Municipal |
| Simt Global Managed |
Stet California and Simt Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stet California and Simt Global
The main advantage of trading using opposite Stet California and Simt Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stet California position performs unexpectedly, Simt Global 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 Global will offset losses from the drop in Simt Global's long position.| Stet California vs. California Municipal Portfolio | Stet California vs. Ab Bond Inflation | Stet California vs. Old Westbury Municipal | Stet California vs. Ab Bond Inflation |
| Simt Global vs. Simt Multi Asset Accumulation | Simt Global vs. Saat Market Growth | Simt Global vs. Simt Real Return | Simt Global vs. Simt Small Cap |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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