Correlation Between SM Investments and Omico Corp
Can any of the company-specific risk be diversified away by investing in both SM Investments and Omico Corp 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 Omico Corp 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 Omico Corp, you can compare the effects of market volatilities on SM Investments and Omico Corp 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 Omico Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of SM Investments and Omico Corp.
Diversification Opportunities for SM Investments and Omico Corp
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SM Investments and Omico is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding SM Investments Corp and Omico Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Omico Corp 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 Omico Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Omico Corp has no effect on the direction of SM Investments i.e., SM Investments and Omico Corp go up and down completely randomly.
Pair Corralation between SM Investments and Omico Corp
Assuming the 90 days trading horizon SM Investments Corp is expected to generate 0.17 times more return on investment than Omico Corp. However, SM Investments Corp is 5.85 times less risky than Omico Corp. It trades about 0.03 of its potential returns per unit of risk. Omico Corp is currently generating about -0.03 per unit of risk. If you would invest 81,716 in SM Investments Corp on August 27, 2024 and sell it today you would earn a total of 6,584 from holding SM Investments Corp or generate 8.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 34.85% |
| Values | Daily Returns |
SM Investments Corp vs. Omico Corp
Performance |
| Timeline |
| SM Investments Corp |
| Omico Corp |
SM Investments and Omico Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SM Investments and Omico Corp
The main advantage of trading using opposite SM Investments and Omico Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SM Investments position performs unexpectedly, Omico Corp 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 Omico Corp will offset losses from the drop in Omico Corp's long position.| SM Investments vs. Apex Mining Co | SM Investments vs. Transpacific Broadband Group | SM Investments vs. Manila Mining Corp | SM Investments vs. Premiere Entertainment |
| Omico Corp vs. Robinsons Retail Holdings | Omico Corp vs. Converge Information Communications | Omico Corp vs. Apex Mining Co | Omico Corp vs. SM Investments Corp |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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