Correlation Between Schmitt Industries and AERWINS Technologies
Can any of the company-specific risk be diversified away by investing in both Schmitt Industries and AERWINS Technologies 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 Schmitt Industries and AERWINS Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Schmitt Industries and AERWINS Technologies, you can compare the effects of market volatilities on Schmitt Industries and AERWINS Technologies 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 Schmitt Industries with a short position of AERWINS Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Schmitt Industries and AERWINS Technologies.
Diversification Opportunities for Schmitt Industries and AERWINS Technologies
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Schmitt and AERWINS is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Schmitt Industries and AERWINS Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AERWINS Technologies and Schmitt Industries 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 Schmitt Industries are associated (or correlated) with AERWINS Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AERWINS Technologies has no effect on the direction of Schmitt Industries i.e., Schmitt Industries and AERWINS Technologies go up and down completely randomly.
Pair Corralation between Schmitt Industries and AERWINS Technologies
Given the investment horizon of 90 days Schmitt Industries is expected to generate 3.45 times more return on investment than AERWINS Technologies. However, Schmitt Industries is 3.45 times more volatile than AERWINS Technologies. It trades about 0.19 of its potential returns per unit of risk. AERWINS Technologies is currently generating about 0.07 per unit of risk. If you would invest 80.00 in Schmitt Industries on September 2, 2024 and sell it today you would lose (61.00) from holding Schmitt Industries or give up 76.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 11.83% |
| Values | Daily Returns |
Schmitt Industries vs. AERWINS Technologies
Performance |
| Timeline |
| Schmitt Industries |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| AERWINS Technologies |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Schmitt Industries and AERWINS Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Schmitt Industries and AERWINS Technologies
The main advantage of trading using opposite Schmitt Industries and AERWINS Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Schmitt Industries position performs unexpectedly, AERWINS Technologies 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 AERWINS Technologies will offset losses from the drop in AERWINS Technologies' long position.| Schmitt Industries vs. Nanalysis Scientific Corp | Schmitt Industries vs. Genasys | Schmitt Industries vs. Kraken Robotics | Schmitt Industries vs. Mesa Laboratories |
| AERWINS Technologies vs. Radcom | AERWINS Technologies vs. FARO Technologies | AERWINS Technologies vs. ServiceNow | AERWINS Technologies vs. Shake Shack |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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