Correlation Between Intevac and Smith AO
Can any of the company-specific risk be diversified away by investing in both Intevac and Smith AO 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 Intevac and Smith AO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intevac and Smith AO, you can compare the effects of market volatilities on Intevac and Smith AO 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 Intevac with a short position of Smith AO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intevac and Smith AO.
Diversification Opportunities for Intevac and Smith AO
Very weak diversification
The 3 months correlation between Intevac and Smith is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Intevac and Smith AO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Smith AO and Intevac 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 Intevac are associated (or correlated) with Smith AO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Smith AO has no effect on the direction of Intevac i.e., Intevac and Smith AO go up and down completely randomly.
Pair Corralation between Intevac and Smith AO
Given the investment horizon of 90 days Intevac is expected to under-perform the Smith AO. In addition to that, Intevac is 5.78 times more volatile than Smith AO. It trades about -0.16 of its total potential returns per unit of risk. Smith AO is currently generating about -0.22 per unit of volatility. If you would invest 7,666 in Smith AO on August 27, 2024 and sell it today you would lose (322.00) from holding Smith AO or give up 4.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intevac vs. Smith AO
Performance |
| Timeline |
| Intevac |
| Smith AO |
Intevac and Smith AO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intevac and Smith AO
The main advantage of trading using opposite Intevac and Smith AO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intevac position performs unexpectedly, Smith AO 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 AO will offset losses from the drop in Smith AO's long position.| Intevac vs. Innovative Solutions and | Intevac vs. Heidrick Struggles International | Intevac vs. ICF International | Intevac vs. PDF Solutions |
| Smith AO vs. Dover | Smith AO vs. Illinois Tool Works | Smith AO vs. Xylem Inc | Smith AO vs. Franklin Electric Co |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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