Correlation Between Simt High and Simt Small
Can any of the company-specific risk be diversified away by investing in both Simt High and Simt Small 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 High and Simt Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Simt High Yield and Simt Small Cap, you can compare the effects of market volatilities on Simt High and Simt Small 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 High with a short position of Simt Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simt High and Simt Small.
Diversification Opportunities for Simt High and Simt Small
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Simt and Simt is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Simt High Yield and Simt Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simt Small Cap and Simt High 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 High Yield are associated (or correlated) with Simt Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simt Small Cap has no effect on the direction of Simt High i.e., Simt High and Simt Small go up and down completely randomly.
Pair Corralation between Simt High and Simt Small
Assuming the 90 days horizon Simt High Yield is expected to generate 0.2 times more return on investment than Simt Small. However, Simt High Yield is 4.93 times less risky than Simt Small. It trades about 0.13 of its potential returns per unit of risk. Simt Small Cap is currently generating about 0.03 per unit of risk. If you would invest 447.00 in Simt High Yield on April 19, 2025 and sell it today you would earn a total of 89.00 from holding Simt High Yield or generate 19.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Simt High Yield vs. Simt Small Cap
Performance |
| Timeline |
| Simt High Yield |
| Simt Small Cap |
Simt High and Simt Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Simt High and Simt Small
The main advantage of trading using opposite Simt High and Simt Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simt High position performs unexpectedly, Simt Small 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 Small will offset losses from the drop in Simt Small's long position.| Simt High vs. Artisan High Income | Simt High vs. Sit International Equity | Simt High vs. Sit Emerging Markets | Simt High vs. Stet Intermediate Term |
| Simt Small vs. Ab Bond Inflation | Simt Small vs. Great West Inflation Protected Securities | Simt Small vs. Ab Bond Inflation | Simt Small vs. Atac Inflation Rotation |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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