Correlation Between Arista Power and Smiths Group
Can any of the company-specific risk be diversified away by investing in both Arista Power and Smiths Group 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 Arista Power and Smiths Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arista Power and Smiths Group Plc, you can compare the effects of market volatilities on Arista Power and Smiths Group 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 Arista Power with a short position of Smiths Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arista Power and Smiths Group.
Diversification Opportunities for Arista Power and Smiths Group
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Arista and Smiths is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Arista Power and Smiths Group Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Smiths Group Plc and Arista Power 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 Arista Power are associated (or correlated) with Smiths Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Smiths Group Plc has no effect on the direction of Arista Power i.e., Arista Power and Smiths Group go up and down completely randomly.
Pair Corralation between Arista Power and Smiths Group
If you would invest 1,979 in Smiths Group Plc on August 27, 2024 and sell it today you would earn a total of 246.00 from holding Smiths Group Plc or generate 12.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arista Power vs. Smiths Group Plc
Performance |
| Timeline |
| Arista Power |
| Smiths Group Plc |
Arista Power and Smiths Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arista Power and Smiths Group
The main advantage of trading using opposite Arista Power and Smiths Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arista Power position performs unexpectedly, Smiths Group 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 Smiths Group will offset losses from the drop in Smiths Group's long position.| Arista Power vs. Element Solutions | Arista Power vs. Orion Engineered Carbons | Arista Power vs. Minerals Technologies | Arista Power vs. Ingevity Corp |
| Smiths Group vs. Arista Power | Smiths Group vs. Atlas Copco AB | Smiths Group vs. American Commerce Solutions |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
Other Complementary Tools
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |