Correlation Between Simt Core and Simt Sp
Can any of the company-specific risk be diversified away by investing in both Simt Core and Simt Sp 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 Core and Simt Sp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Simt E Fixed and Simt Sp 500, you can compare the effects of market volatilities on Simt Core and Simt Sp 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 Core with a short position of Simt Sp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simt Core and Simt Sp.
Diversification Opportunities for Simt Core and Simt Sp
Very poor diversification
The 3 months correlation between Simt and Simt is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Simt E Fixed and Simt Sp 500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simt Sp 500 and Simt Core 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 E Fixed are associated (or correlated) with Simt Sp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simt Sp 500 has no effect on the direction of Simt Core i.e., Simt Core and Simt Sp go up and down completely randomly.
Pair Corralation between Simt Core and Simt Sp
Assuming the 90 days horizon Simt E Fixed is expected to generate 0.38 times more return on investment than Simt Sp. However, Simt E Fixed is 2.61 times less risky than Simt Sp. It trades about 0.22 of its potential returns per unit of risk. Simt Sp 500 is currently generating about 0.08 per unit of risk. If you would invest 947.00 in Simt E Fixed on May 29, 2025 and sell it today you would earn a total of 13.00 from holding Simt E Fixed or generate 1.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Simt E Fixed vs. Simt Sp 500
Performance |
| Timeline |
| Simt E Fixed |
| Simt Sp 500 |
Simt Core and Simt Sp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Simt Core and Simt Sp
The main advantage of trading using opposite Simt Core and Simt Sp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simt Core position performs unexpectedly, Simt Sp 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 Sp will offset losses from the drop in Simt Sp's long position.| Simt Core vs. Sit Emerging Markets | Simt Core vs. Simt Multi Asset Income | Simt Core vs. Sit International Equity | Simt Core vs. Simt Global Managed |
| Simt Sp vs. Simt Small Cap | Simt Sp vs. Simt Small Cap | Simt Sp vs. Simt Large Cap | Simt Sp vs. Sit International Equity |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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