Correlation Between Simt Global and Simt Small
Can any of the company-specific risk be diversified away by investing in both Simt Global 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 Global 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 Global Managed and Simt Small Cap, you can compare the effects of market volatilities on Simt Global 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 Global with a short position of Simt Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simt Global and Simt Small.
Diversification Opportunities for Simt Global and Simt Small
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Simt and Simt is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Simt Global Managed 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 Global 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 Global Managed 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 Global i.e., Simt Global and Simt Small go up and down completely randomly.
Pair Corralation between Simt Global and Simt Small
Assuming the 90 days horizon Simt Global is expected to generate 5.07 times less return on investment than Simt Small. But when comparing it to its historical volatility, Simt Global Managed is 2.25 times less risky than Simt Small. It trades about 0.06 of its potential returns per unit of risk. Simt Small Cap is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 3,391 in Simt Small Cap on June 12, 2025 and sell it today you would earn a total of 287.00 from holding Simt Small Cap or generate 8.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Simt Global Managed vs. Simt Small Cap
Performance |
| Timeline |
| Simt Global Managed |
| Simt Small Cap |
Simt Global and Simt Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Simt Global and Simt Small
The main advantage of trading using opposite Simt Global and Simt Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simt Global 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 Global vs. Fidelity Advisor Energy | Simt Global vs. Calvert Global Energy | Simt Global vs. Adams Natural Resources | Simt Global vs. Global Resources Fund |
| Simt Small vs. Blackrock Government Bond | Simt Small vs. Us Government Securities | Simt Small vs. Jpmorgan Government Bond | Simt Small vs. Columbia Government Mortgage |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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