Correlation Between Simt Multi-asset and Federated Municipal
Can any of the company-specific risk be diversified away by investing in both Simt Multi-asset and Federated Municipal 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 Federated Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Simt Multi Asset Inflation and Federated Municipal Ultrashort, you can compare the effects of market volatilities on Simt Multi-asset and Federated Municipal 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 Federated Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simt Multi-asset and Federated Municipal.
Diversification Opportunities for Simt Multi-asset and Federated Municipal
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between SIMT and Federated is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Simt Multi Asset Inflation and Federated Municipal Ultrashort in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Municipal 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 Inflation are associated (or correlated) with Federated Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Municipal has no effect on the direction of Simt Multi-asset i.e., Simt Multi-asset and Federated Municipal go up and down completely randomly.
Pair Corralation between Simt Multi-asset and Federated Municipal
Assuming the 90 days horizon Simt Multi Asset Inflation is expected to generate 3.76 times more return on investment than Federated Municipal. However, Simt Multi-asset is 3.76 times more volatile than Federated Municipal Ultrashort. It trades about 0.04 of its potential returns per unit of risk. Federated Municipal Ultrashort is currently generating about 0.1 per unit of risk. If you would invest 797.00 in Simt Multi Asset Inflation on April 4, 2025 and sell it today you would earn a total of 6.00 from holding Simt Multi Asset Inflation or generate 0.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Simt Multi Asset Inflation vs. Federated Municipal Ultrashort
Performance |
| Timeline |
| Simt Multi Asset |
| Federated Municipal |
Simt Multi-asset and Federated Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Simt Multi-asset and Federated Municipal
The main advantage of trading using opposite Simt Multi-asset and Federated Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simt Multi-asset position performs unexpectedly, Federated Municipal 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 Federated Municipal will offset losses from the drop in Federated Municipal's long position.| Simt Multi-asset vs. Abs Insights Emerging | Simt Multi-asset vs. Gmo Emerging Markets | Simt Multi-asset vs. Aqr Tm Emerging | Simt Multi-asset vs. William Blair Emerging |
| Federated Municipal vs. Simt Multi Asset Inflation | Federated Municipal vs. Ab Bond Inflation | Federated Municipal vs. Great West Inflation Protected Securities | Federated Municipal vs. Ab Bond 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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