Correlation Between Cyngn and Smith Micro
Can any of the company-specific risk be diversified away by investing in both Cyngn and Smith Micro 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 Cyngn and Smith Micro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cyngn Inc and Smith Micro Software, you can compare the effects of market volatilities on Cyngn and Smith Micro 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 Cyngn with a short position of Smith Micro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cyngn and Smith Micro.
Diversification Opportunities for Cyngn and Smith Micro
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Cyngn and Smith is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Cyngn Inc and Smith Micro Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Smith Micro Software and Cyngn 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 Cyngn Inc are associated (or correlated) with Smith Micro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Smith Micro Software has no effect on the direction of Cyngn i.e., Cyngn and Smith Micro go up and down completely randomly.
Pair Corralation between Cyngn and Smith Micro
Considering the 90-day investment horizon Cyngn Inc is expected to under-perform the Smith Micro. But the stock apears to be less risky and, when comparing its historical volatility, Cyngn Inc is 1.06 times less risky than Smith Micro. The stock trades about -0.09 of its potential returns per unit of risk. The Smith Micro Software is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 62.00 in Smith Micro Software on November 2, 2024 and sell it today you would earn a total of 68.00 from holding Smith Micro Software or generate 109.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cyngn Inc vs. Smith Micro Software
Performance |
| Timeline |
| Cyngn Inc |
| Smith Micro Software |
Cyngn and Smith Micro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cyngn and Smith Micro
The main advantage of trading using opposite Cyngn and Smith Micro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cyngn position performs unexpectedly, Smith Micro 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 Smith Micro will offset losses from the drop in Smith Micro's long position.The idea behind Cyngn Inc and Smith Micro Software pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Smith Micro vs. Dubber Limited | Smith Micro vs. Advanced Health Intelligence | Smith Micro vs. Danavation Technologies Corp | Smith Micro vs. BASE Inc |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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