Correlation Between Simt Mid and SP Funds

Can any of the company-specific risk be diversified away by investing in both Simt Mid and SP Funds 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 Mid and SP Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Simt Mid Cap and SP Funds Trust, you can compare the effects of market volatilities on Simt Mid and SP Funds 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 Mid with a short position of SP Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simt Mid and SP Funds.

Diversification Opportunities for Simt Mid and SP Funds

0.24

Correlation Coefficient

Simt Mid  SP Funds

Modest diversification

The 3 months correlation between Simt and SPTE is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Simt Mid Cap and SP Funds Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SP Funds Trust and Simt Mid 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 Mid Cap are associated (or correlated) with SP Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SP Funds Trust has no effect on the direction of Simt Mid i.e., Simt Mid and SP Funds go up and down completely randomly.

Pair Corralation between Simt Mid and SP Funds

Assuming the 90 days horizon Simt Mid is expected to generate 1.36 times less return on investment than SP Funds. But when comparing it to its historical volatility, Simt Mid Cap is 1.58 times less risky than SP Funds. It trades about 0.07 of its potential returns per unit of risk. SP Funds Trust is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  3,353  in SP Funds Trust on September 13, 2025 and sell it today you would earn a total of  152.00  from holding SP Funds Trust or generate 4.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Simt Mid Cap  vs.  SP Funds Trust

Simt Mid Cap

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Simt Mid Cap are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Simt Mid is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

SP Funds Trust

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in SP Funds Trust are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, SP Funds is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Simt Mid and SP Funds

The main advantage of trading using opposite Simt Mid and SP Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simt Mid position performs unexpectedly, SP Funds 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 SP Funds will offset losses from the drop in SP Funds' long position.

The idea behind Simt Mid Cap and SP Funds Trust pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 CEOs Directory module to screen CEOs from public companies around the world.