Correlation Between Oncimmune Holdings and Smithson Investment
Can any of the company-specific risk be diversified away by investing in both Oncimmune Holdings and Smithson Investment 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 Oncimmune Holdings and Smithson Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oncimmune Holdings plc and Smithson Investment Trust, you can compare the effects of market volatilities on Oncimmune Holdings and Smithson Investment 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 Oncimmune Holdings with a short position of Smithson Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oncimmune Holdings and Smithson Investment.
Diversification Opportunities for Oncimmune Holdings and Smithson Investment
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Oncimmune and Smithson is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Oncimmune Holdings plc and Smithson Investment Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Smithson Investment Trust and Oncimmune Holdings 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 Oncimmune Holdings plc are associated (or correlated) with Smithson Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Smithson Investment Trust has no effect on the direction of Oncimmune Holdings i.e., Oncimmune Holdings and Smithson Investment go up and down completely randomly.
Pair Corralation between Oncimmune Holdings and Smithson Investment
Assuming the 90 days trading horizon Oncimmune Holdings is expected to generate 5.33 times less return on investment than Smithson Investment. In addition to that, Oncimmune Holdings is 1.18 times more volatile than Smithson Investment Trust. It trades about 0.03 of its total potential returns per unit of risk. Smithson Investment Trust is currently generating about 0.19 per unit of volatility. If you would invest 143,400 in Smithson Investment Trust on August 29, 2024 and sell it today you would earn a total of 6,200 from holding Smithson Investment Trust or generate 4.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oncimmune Holdings plc vs. Smithson Investment Trust
Performance |
| Timeline |
| Oncimmune Holdings plc |
| Smithson Investment Trust |
Oncimmune Holdings and Smithson Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oncimmune Holdings and Smithson Investment
The main advantage of trading using opposite Oncimmune Holdings and Smithson Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oncimmune Holdings position performs unexpectedly, Smithson Investment 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 Smithson Investment will offset losses from the drop in Smithson Investment's long position.| Oncimmune Holdings vs. Orient Telecoms | Oncimmune Holdings vs. Ashtead Technology Holdings | Oncimmune Holdings vs. Zoom Video Communications | Oncimmune Holdings vs. Vitec Software Group |
| Smithson Investment vs. Catalyst Media Group | Smithson Investment vs. Oncimmune Holdings plc | Smithson Investment vs. Invesco Health Care | Smithson Investment vs. Coor Service Management |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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