Correlation Between Smith Midland and Summa Silver
Can any of the company-specific risk be diversified away by investing in both Smith Midland and Summa Silver 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 Smith Midland and Summa Silver into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Smith Midland Corp and Summa Silver Corp, you can compare the effects of market volatilities on Smith Midland and Summa Silver 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 Smith Midland with a short position of Summa Silver. Check out your portfolio center. Please also check ongoing floating volatility patterns of Smith Midland and Summa Silver.
Diversification Opportunities for Smith Midland and Summa Silver
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Smith and Summa is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Smith Midland Corp and Summa Silver Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Summa Silver Corp and Smith Midland 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 Smith Midland Corp are associated (or correlated) with Summa Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Summa Silver Corp has no effect on the direction of Smith Midland i.e., Smith Midland and Summa Silver go up and down completely randomly.
Pair Corralation between Smith Midland and Summa Silver
Given the investment horizon of 90 days Smith Midland Corp is expected to generate 0.91 times more return on investment than Summa Silver. However, Smith Midland Corp is 1.1 times less risky than Summa Silver. It trades about 0.02 of its potential returns per unit of risk. Summa Silver Corp is currently generating about 0.0 per unit of risk. If you would invest 3,873 in Smith Midland Corp on November 9, 2024 and sell it today you would lose (120.00) from holding Smith Midland Corp or give up 3.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Smith Midland Corp vs. Summa Silver Corp
Performance |
| Timeline |
| Smith Midland Corp |
| Summa Silver Corp |
Smith Midland and Summa Silver Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Smith Midland and Summa Silver
The main advantage of trading using opposite Smith Midland and Summa Silver positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Smith Midland position performs unexpectedly, Summa Silver 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 Summa Silver will offset losses from the drop in Summa Silver's long position.| Smith Midland vs. United States Lime | Smith Midland vs. Holcim | Smith Midland vs. Lafargeholcim Ltd ADR | Smith Midland vs. Cementos Pacasmayo SAA |
| Summa Silver vs. P2 Gold | Summa Silver vs. Enduro Metals | Summa Silver vs. Kodiak Copper Corp | Summa Silver vs. Mirasol Resources |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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