Correlation Between Henderson Investment and SM Investments
Can any of the company-specific risk be diversified away by investing in both Henderson Investment and SM Investments 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 Henderson Investment and SM Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Henderson Investment Ltd and SM Investments, you can compare the effects of market volatilities on Henderson Investment and SM Investments 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 Henderson Investment with a short position of SM Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Henderson Investment and SM Investments.
Diversification Opportunities for Henderson Investment and SM Investments
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Henderson and SVTMF is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Henderson Investment Ltd and SM Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SM Investments and Henderson Investment 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 Henderson Investment Ltd are associated (or correlated) with SM Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SM Investments has no effect on the direction of Henderson Investment i.e., Henderson Investment and SM Investments go up and down completely randomly.
Pair Corralation between Henderson Investment and SM Investments
If you would invest 1,420 in SM Investments on September 3, 2024 and sell it today you would earn a total of 180.00 from holding SM Investments or generate 12.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Henderson Investment Ltd vs. SM Investments
Performance |
| Timeline |
| Henderson Investment |
| SM Investments |
Henderson Investment and SM Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Henderson Investment and SM Investments
The main advantage of trading using opposite Henderson Investment and SM Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Henderson Investment position performs unexpectedly, SM Investments 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 SM Investments will offset losses from the drop in SM Investments' long position.| Henderson Investment vs. SM Investments | Henderson Investment vs. Aeon Co Ltd | Henderson Investment vs. El Puerto de | Henderson Investment vs. Tokyu Corp ADR |
| SM Investments vs. Kaltura | SM Investments vs. ServiceNow | SM Investments vs. Valneva SE ADR | SM Investments vs. Mangazeya Mining |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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