Correlation Between SM Investments and International Container
Can any of the company-specific risk be diversified away by investing in both SM Investments and International Container 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 SM Investments and International Container into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SM Investments Corp and International Container Terminal, you can compare the effects of market volatilities on SM Investments and International Container 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 SM Investments with a short position of International Container. Check out your portfolio center. Please also check ongoing floating volatility patterns of SM Investments and International Container.
Diversification Opportunities for SM Investments and International Container
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SM Investments and International is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding SM Investments Corp and International Container Termin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Container and SM Investments 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 SM Investments Corp are associated (or correlated) with International Container. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Container has no effect on the direction of SM Investments i.e., SM Investments and International Container go up and down completely randomly.
Pair Corralation between SM Investments and International Container
Assuming the 90 days trading horizon SM Investments Corp is expected to under-perform the International Container. In addition to that, SM Investments is 1.05 times more volatile than International Container Terminal. It trades about -0.03 of its total potential returns per unit of risk. International Container Terminal is currently generating about 0.01 per unit of volatility. If you would invest 39,000 in International Container Terminal on September 12, 2024 and sell it today you would lose (200.00) from holding International Container Terminal or give up 0.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SM Investments Corp vs. International Container Termin
Performance |
| Timeline |
| SM Investments Corp |
| International Container |
SM Investments and International Container Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SM Investments and International Container
The main advantage of trading using opposite SM Investments and International Container positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SM Investments position performs unexpectedly, International Container 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 International Container will offset losses from the drop in International Container's long position.| SM Investments vs. Bank of the | SM Investments vs. Jollibee Foods Corp | SM Investments vs. Manulife Financial Corp | SM Investments vs. Philippine Business Bank |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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