Correlation Between SCI Information and SMCoreInc
Can any of the company-specific risk be diversified away by investing in both SCI Information and SMCoreInc 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 SCI Information and SMCoreInc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SCI Information Service and SMCoreInc, you can compare the effects of market volatilities on SCI Information and SMCoreInc 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 SCI Information with a short position of SMCoreInc. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCI Information and SMCoreInc.
Diversification Opportunities for SCI Information and SMCoreInc
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SCI and SMCoreInc is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding SCI Information Service and SMCoreInc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SMCoreInc and SCI Information 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 SCI Information Service are associated (or correlated) with SMCoreInc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SMCoreInc has no effect on the direction of SCI Information i.e., SCI Information and SMCoreInc go up and down completely randomly.
Pair Corralation between SCI Information and SMCoreInc
Assuming the 90 days trading horizon SCI Information Service is expected to under-perform the SMCoreInc. But the stock apears to be less risky and, when comparing its historical volatility, SCI Information Service is 1.05 times less risky than SMCoreInc. The stock trades about -0.07 of its potential returns per unit of risk. The SMCoreInc is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 517,000 in SMCoreInc on November 9, 2024 and sell it today you would lose (93,000) from holding SMCoreInc or give up 17.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.61% |
| Values | Daily Returns |
SCI Information Service vs. SMCoreInc
Performance |
| Timeline |
| SCI Information Service |
| SMCoreInc |
SCI Information and SMCoreInc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SCI Information and SMCoreInc
The main advantage of trading using opposite SCI Information and SMCoreInc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCI Information position performs unexpectedly, SMCoreInc 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 SMCoreInc will offset losses from the drop in SMCoreInc's long position.| SCI Information vs. Busan Industrial Co | SCI Information vs. Busan Ind | SCI Information vs. Mirae Asset Daewoo | SCI Information vs. Shinhan WTI Futures |
| SMCoreInc vs. Lotte Chilsung Beverage | SMCoreInc vs. Iljin Display | SMCoreInc vs. Hanjin Transportation Co | SMCoreInc vs. LG Household Healthcare |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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