Correlation Between Simt Tax-managed and Amer Beacon
Can any of the company-specific risk be diversified away by investing in both Simt Tax-managed and Amer Beacon 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 Tax-managed and Amer Beacon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Simt Tax Managed International and Amer Beacon Ark, you can compare the effects of market volatilities on Simt Tax-managed and Amer Beacon 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 Tax-managed with a short position of Amer Beacon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simt Tax-managed and Amer Beacon.
Diversification Opportunities for Simt Tax-managed and Amer Beacon
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Simt and Amer is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Simt Tax Managed International and Amer Beacon Ark in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amer Beacon Ark and Simt Tax-managed 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 Tax Managed International are associated (or correlated) with Amer Beacon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amer Beacon Ark has no effect on the direction of Simt Tax-managed i.e., Simt Tax-managed and Amer Beacon go up and down completely randomly.
Pair Corralation between Simt Tax-managed and Amer Beacon
Assuming the 90 days horizon Simt Tax Managed International is expected to generate 0.22 times more return on investment than Amer Beacon. However, Simt Tax Managed International is 4.46 times less risky than Amer Beacon. It trades about -0.02 of its potential returns per unit of risk. Amer Beacon Ark is currently generating about -0.01 per unit of risk. If you would invest 1,330 in Simt Tax Managed International on August 24, 2025 and sell it today you would lose (8.00) from holding Simt Tax Managed International or give up 0.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Simt Tax Managed International vs. Amer Beacon Ark
Performance |
| Timeline |
| Simt Tax Managed |
| Amer Beacon Ark |
Simt Tax-managed and Amer Beacon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Simt Tax-managed and Amer Beacon
The main advantage of trading using opposite Simt Tax-managed and Amer Beacon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simt Tax-managed position performs unexpectedly, Amer Beacon 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 Amer Beacon will offset losses from the drop in Amer Beacon's long position.| Simt Tax-managed vs. Dreyfus Opportunistic Small | Simt Tax-managed vs. Royce Small Cap Value | Simt Tax-managed vs. Ashmore Emerging Markets | Simt Tax-managed vs. Ashmore Emerging Markets |
| Amer Beacon vs. Ashmore Emerging Markets | Amer Beacon vs. Ashmore Emerging Markets | Amer Beacon vs. Summit Global Investments | Amer Beacon vs. Royce Small Cap Value |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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