Correlation Between Marks Spencer and SM Investments
Can any of the company-specific risk be diversified away by investing in both Marks Spencer 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 Marks Spencer and SM Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Marks Spencer Group and SM Investments, you can compare the effects of market volatilities on Marks Spencer 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 Marks Spencer with a short position of SM Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marks Spencer and SM Investments.
Diversification Opportunities for Marks Spencer and SM Investments
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Marks and SVTMF is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Marks Spencer Group and SM Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SM Investments and Marks Spencer 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 Marks Spencer Group 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 Marks Spencer i.e., Marks Spencer and SM Investments go up and down completely randomly.
Pair Corralation between Marks Spencer and SM Investments
Assuming the 90 days horizon Marks Spencer Group is expected to generate 1.37 times more return on investment than SM Investments. However, Marks Spencer is 1.37 times more volatile than SM Investments. It trades about 0.0 of its potential returns per unit of risk. SM Investments is currently generating about -0.22 per unit of risk. If you would invest 992.00 in Marks Spencer Group on September 4, 2024 and sell it today you would lose (2.00) from holding Marks Spencer Group or give up 0.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Marks Spencer Group vs. SM Investments
Performance |
| Timeline |
| Marks Spencer Group |
| SM Investments |
Marks Spencer and SM Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marks Spencer and SM Investments
The main advantage of trading using opposite Marks Spencer and SM Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marks Spencer 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.| Marks Spencer vs. SM Investments | Marks Spencer vs. Aeon Co Ltd | Marks Spencer vs. Dillards | Marks Spencer vs. Shoprite Holdings Ltd |
| SM Investments vs. Paiute Oil Mining | SM Investments vs. Sonos Inc | SM Investments vs. Playa Hotels Resorts | SM Investments vs. Summit Materials |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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