Correlation Between SM Energy and CT Global
Can any of the company-specific risk be diversified away by investing in both SM Energy and CT Global 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 SM Energy and CT Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SM Energy Co and CT Global Managed, you can compare the effects of market volatilities on SM Energy and CT Global 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 SM Energy with a short position of CT Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of SM Energy and CT Global.
Diversification Opportunities for SM Energy and CT Global
Very good diversification
The 3 months correlation between 0KZA and CMPG is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding SM Energy Co and CT Global Managed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CT Global Managed and SM Energy 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 SM Energy Co are associated (or correlated) with CT Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CT Global Managed has no effect on the direction of SM Energy i.e., SM Energy and CT Global go up and down completely randomly.
Pair Corralation between SM Energy and CT Global
Assuming the 90 days trading horizon SM Energy Co is expected to generate 6.29 times more return on investment than CT Global. However, SM Energy is 6.29 times more volatile than CT Global Managed. It trades about 0.35 of its potential returns per unit of risk. CT Global Managed is currently generating about 0.22 per unit of risk. If you would invest 3,764 in SM Energy Co on October 25, 2024 and sell it today you would earn a total of 431.00 from holding SM Energy Co or generate 11.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SM Energy Co vs. CT Global Managed
Performance |
| Timeline |
| SM Energy |
| CT Global Managed |
SM Energy and CT Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SM Energy and CT Global
The main advantage of trading using opposite SM Energy and CT Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SM Energy position performs unexpectedly, CT Global 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 CT Global will offset losses from the drop in CT Global's long position.| SM Energy vs. Alien Metals | SM Energy vs. Bankers Investment Trust | SM Energy vs. New Residential Investment | SM Energy vs. Europa Metals |
| CT Global vs. Livermore Investments Group | CT Global vs. MoneysupermarketCom Group PLC | CT Global vs. International Consolidated Airlines | CT Global vs. Gear4music Plc |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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