Correlation Between SMC Investment and Materials Petroleum
Can any of the company-specific risk be diversified away by investing in both SMC Investment and Materials Petroleum 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 SMC Investment and Materials Petroleum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SMC Investment Trading and Materials Petroleum JSC, you can compare the effects of market volatilities on SMC Investment and Materials Petroleum 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 SMC Investment with a short position of Materials Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of SMC Investment and Materials Petroleum.
Diversification Opportunities for SMC Investment and Materials Petroleum
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SMC and Materials is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding SMC Investment Trading and Materials Petroleum JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Materials Petroleum JSC and SMC Investment 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 SMC Investment Trading are associated (or correlated) with Materials Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Materials Petroleum JSC has no effect on the direction of SMC Investment i.e., SMC Investment and Materials Petroleum go up and down completely randomly.
Pair Corralation between SMC Investment and Materials Petroleum
Assuming the 90 days trading horizon SMC Investment Trading is expected to under-perform the Materials Petroleum. But the stock apears to be less risky and, when comparing its historical volatility, SMC Investment Trading is 1.51 times less risky than Materials Petroleum. The stock trades about -0.03 of its potential returns per unit of risk. The Materials Petroleum JSC is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 3,071,638 in Materials Petroleum JSC on October 12, 2024 and sell it today you would lose (341,638) from holding Materials Petroleum JSC or give up 11.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 58.52% |
| Values | Daily Returns |
SMC Investment Trading vs. Materials Petroleum JSC
Performance |
| Timeline |
| SMC Investment Trading |
| Materials Petroleum JSC |
SMC Investment and Materials Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SMC Investment and Materials Petroleum
The main advantage of trading using opposite SMC Investment and Materials Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SMC Investment position performs unexpectedly, Materials Petroleum 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 Materials Petroleum will offset losses from the drop in Materials Petroleum's long position.| SMC Investment vs. Din Capital Investment | SMC Investment vs. Danang Education Investment | SMC Investment vs. Materials Petroleum JSC | SMC Investment vs. Ben Thanh Rubber |
| Materials Petroleum vs. FIT INVEST JSC | Materials Petroleum vs. Damsan JSC | Materials Petroleum vs. An Phat Plastic | Materials Petroleum vs. APG Securities Joint |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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