Correlation Between Maximus and SMX Public

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Can any of the company-specific risk be diversified away by investing in both Maximus and SMX Public 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 Maximus and SMX Public into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Maximus and SMX Public Limited, you can compare the effects of market volatilities on Maximus and SMX Public 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 Maximus with a short position of SMX Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maximus and SMX Public.

Diversification Opportunities for Maximus and SMX Public

0.01
  Correlation Coefficient

Significant diversification

The 3 months correlation between Maximus and SMX is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Maximus and SMX Public Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SMX Public Limited and Maximus 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 Maximus are associated (or correlated) with SMX Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SMX Public Limited has no effect on the direction of Maximus i.e., Maximus and SMX Public go up and down completely randomly.

Pair Corralation between Maximus and SMX Public

Considering the 90-day investment horizon Maximus is expected to under-perform the SMX Public. But the stock apears to be less risky and, when comparing its historical volatility, Maximus is 48.21 times less risky than SMX Public. The stock trades about -0.01 of its potential returns per unit of risk. The SMX Public Limited is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  4.00  in SMX Public Limited on August 31, 2024 and sell it today you would lose (3.01) from holding SMX Public Limited or give up 75.25% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy78.61%
ValuesDaily Returns

Maximus  vs.  SMX Public Limited

 Performance 
       Timeline  
Maximus 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Maximus has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's primary indicators remain comparatively stable which may send shares a bit higher in December 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.
SMX Public Limited 

Risk-Adjusted Performance

12 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in SMX Public Limited are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent basic indicators, SMX Public showed solid returns over the last few months and may actually be approaching a breakup point.

Maximus and SMX Public Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Maximus and SMX Public

The main advantage of trading using opposite Maximus and SMX Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maximus position performs unexpectedly, SMX Public 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 SMX Public will offset losses from the drop in SMX Public's long position.
The idea behind Maximus and SMX Public Limited 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.
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.

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