Correlation Between 3M and SMBCAC
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By analyzing existing cross correlation between 3M Company and SMBCAC 19 15 OCT 26, you can compare the effects of market volatilities on 3M and SMBCAC 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 3M with a short position of SMBCAC. Check out your portfolio center. Please also check ongoing floating volatility patterns of 3M and SMBCAC.
Diversification Opportunities for 3M and SMBCAC
Very good diversification
The 3 months correlation between 3M and SMBCAC is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding 3M Company and SMBCAC 19 15 OCT 26 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SMBCAC 19 15 and 3M 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 3M Company are associated (or correlated) with SMBCAC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SMBCAC 19 15 has no effect on the direction of 3M i.e., 3M and SMBCAC go up and down completely randomly.
Pair Corralation between 3M and SMBCAC
Considering the 90-day investment horizon 3M Company is expected to generate 1.06 times more return on investment than SMBCAC. However, 3M is 1.06 times more volatile than SMBCAC 19 15 OCT 26. It trades about 0.03 of its potential returns per unit of risk. SMBCAC 19 15 OCT 26 is currently generating about -0.56 per unit of risk. If you would invest 12,723 in 3M Company on August 24, 2024 and sell it today you would earn a total of 119.00 from holding 3M Company or generate 0.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 17.39% |
| Values | Daily Returns |
3M Company vs. SMBCAC 19 15 OCT 26
Performance |
| Timeline |
| 3M Company |
| SMBCAC 19 15 |
3M and SMBCAC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 3M and SMBCAC
The main advantage of trading using opposite 3M and SMBCAC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 3M position performs unexpectedly, SMBCAC 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 SMBCAC will offset losses from the drop in SMBCAC's long position.| 3M vs. MDU Resources Group | 3M vs. Valmont Industries | 3M vs. Griffon | 3M vs. Compass Diversified Holdings |
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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