Correlation Between Simt Tax-managed and Saat Core

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

By analyzing existing cross correlation between Simt Tax Managed Smallmid and Saat E Market, you can compare the effects of market volatilities on Simt Tax-managed and Saat Core 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 Saat Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simt Tax-managed and Saat Core.

Diversification Opportunities for Simt Tax-managed and Saat Core

0.87

Correlation Coefficient

Simt Tax-managed  Saat Core

Very poor diversification

The 3 months correlation between Simt and Saat is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Simt Tax Managed Smallmid and Saat E Market in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saat E Market 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 Smallmid are associated (or correlated) with Saat Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saat E Market has no effect on the direction of Simt Tax-managed i.e., Simt Tax-managed and Saat Core go up and down completely randomly.

Pair Corralation between Simt Tax-managed and Saat Core

Assuming the 90 days horizon Simt Tax Managed Smallmid is expected to under-perform the Saat Core. In addition to that, Simt Tax-managed is 2.47 times more volatile than Saat E Market. It trades about -0.03 of its total potential returns per unit of risk. Saat E Market is currently generating about 0.0 per unit of volatility. If you would invest  1,277  in Saat E Market on February 14, 2025 and sell it today you would lose (2.00) from holding Saat E Market or give up 0.16% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Simt Tax Managed Smallmid  vs.  Saat E Market

Simt Tax Managed

Risk-Adjusted Performance

Very Weak

Over the last 90 days Simt Tax Managed Smallmid has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Simt Tax-managed is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Saat E Market

Risk-Adjusted Performance

Very Weak

Over the last 90 days Saat E Market has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Saat Core is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Simt Tax-managed and Saat Core

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

The idea behind Simt Tax Managed Smallmid and Saat E Market 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.