Correlation Between United States and Smithson Investment
Can any of the company-specific risk be diversified away by investing in both United States and Smithson Investment 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 United States and Smithson Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United States Steel and Smithson Investment Trust, you can compare the effects of market volatilities on United States and Smithson Investment 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 United States with a short position of Smithson Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of United States and Smithson Investment.
Diversification Opportunities for United States and Smithson Investment
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between United and Smithson is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding United States Steel and Smithson Investment Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Smithson Investment Trust and United States 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 United States Steel are associated (or correlated) with Smithson Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Smithson Investment Trust has no effect on the direction of United States i.e., United States and Smithson Investment go up and down completely randomly.
Pair Corralation between United States and Smithson Investment
Assuming the 90 days trading horizon United States Steel is expected to generate 3.33 times more return on investment than Smithson Investment. However, United States is 3.33 times more volatile than Smithson Investment Trust. It trades about 0.19 of its potential returns per unit of risk. Smithson Investment Trust is currently generating about 0.24 per unit of risk. If you would invest 3,288 in United States Steel on November 2, 2024 and sell it today you would earn a total of 356.00 from holding United States Steel or generate 10.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
United States Steel vs. Smithson Investment Trust
Performance |
| Timeline |
| United States Steel |
| Smithson Investment Trust |
United States and Smithson Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United States and Smithson Investment
The main advantage of trading using opposite United States and Smithson Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United States position performs unexpectedly, Smithson Investment 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 Smithson Investment will offset losses from the drop in Smithson Investment's long position.| United States vs. Automatic Data Processing | United States vs. Coeur Mining | United States vs. International Biotechnology Trust | United States vs. Golden Metal Resources |
| Smithson Investment vs. Global Net Lease | Smithson Investment vs. Bankers Investment Trust | Smithson Investment vs. BlackRock Frontiers Investment | Smithson Investment vs. CAP LEASE AVIATION |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
Other Complementary Tools
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |