Correlation Between Smith AO and Nuburu
Can any of the company-specific risk be diversified away by investing in both Smith AO and Nuburu 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 Smith AO and Nuburu into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Smith AO and Nuburu Inc, you can compare the effects of market volatilities on Smith AO and Nuburu 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 Smith AO with a short position of Nuburu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Smith AO and Nuburu.
Diversification Opportunities for Smith AO and Nuburu
Modest diversification
The 3 months correlation between Smith and Nuburu is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Smith AO and Nuburu Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuburu Inc and Smith AO 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 Smith AO are associated (or correlated) with Nuburu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuburu Inc has no effect on the direction of Smith AO i.e., Smith AO and Nuburu go up and down completely randomly.
Pair Corralation between Smith AO and Nuburu
Considering the 90-day investment horizon Smith AO is expected to generate 0.12 times more return on investment than Nuburu. However, Smith AO is 8.58 times less risky than Nuburu. It trades about 0.02 of its potential returns per unit of risk. Nuburu Inc is currently generating about -0.03 per unit of risk. If you would invest 6,734 in Smith AO on August 31, 2024 and sell it today you would earn a total of 676.00 from holding Smith AO or generate 10.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Smith AO vs. Nuburu Inc
Performance |
| Timeline |
| Smith AO |
| Nuburu Inc |
Smith AO and Nuburu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Smith AO and Nuburu
The main advantage of trading using opposite Smith AO and Nuburu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Smith AO position performs unexpectedly, Nuburu 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 Nuburu will offset losses from the drop in Nuburu's long position.| Smith AO vs. Dover | Smith AO vs. Illinois Tool Works | Smith AO vs. Xylem Inc | Smith AO vs. Franklin Electric Co |
| Nuburu vs. Laser Photonics | Nuburu vs. JE Cleantech Holdings | Nuburu vs. Reelcause | Nuburu vs. Shapeways Holdings, Common |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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