Correlation Between Smartmetric and Hi Sun
Can any of the company-specific risk be diversified away by investing in both Smartmetric and Hi Sun 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 Smartmetric and Hi Sun into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Smartmetric and Hi Sun Technology, you can compare the effects of market volatilities on Smartmetric and Hi Sun 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 Smartmetric with a short position of Hi Sun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Smartmetric and Hi Sun.
Diversification Opportunities for Smartmetric and Hi Sun
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Smartmetric and HISNF is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Smartmetric and Hi Sun Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hi Sun Technology and Smartmetric 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 Smartmetric are associated (or correlated) with Hi Sun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hi Sun Technology has no effect on the direction of Smartmetric i.e., Smartmetric and Hi Sun go up and down completely randomly.
Pair Corralation between Smartmetric and Hi Sun
Given the investment horizon of 90 days Smartmetric is expected to generate 9.83 times more return on investment than Hi Sun. However, Smartmetric is 9.83 times more volatile than Hi Sun Technology. It trades about 0.1 of its potential returns per unit of risk. Hi Sun Technology is currently generating about 0.03 per unit of risk. If you would invest 0.11 in Smartmetric on September 3, 2024 and sell it today you would lose (0.10) from holding Smartmetric or give up 90.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Smartmetric vs. Hi Sun Technology
Performance |
| Timeline |
| Smartmetric |
| Hi Sun Technology |
Smartmetric and Hi Sun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Smartmetric and Hi Sun
The main advantage of trading using opposite Smartmetric and Hi Sun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Smartmetric position performs unexpectedly, Hi Sun 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 Hi Sun will offset losses from the drop in Hi Sun's long position.| Smartmetric vs. Telos Corp | Smartmetric vs. Fuse Science | Smartmetric vs. Data443 Risk Mitigation | Smartmetric vs. Taoping |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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