Correlation Between Smoore International and Imperial Brands
Can any of the company-specific risk be diversified away by investing in both Smoore International and Imperial Brands 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 Smoore International and Imperial Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Smoore International Holdings and Imperial Brands PLC, you can compare the effects of market volatilities on Smoore International and Imperial Brands 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 Smoore International with a short position of Imperial Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Smoore International and Imperial Brands.
Diversification Opportunities for Smoore International and Imperial Brands
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Smoore and Imperial is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Smoore International Holdings and Imperial Brands PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Imperial Brands PLC and Smoore International 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 Smoore International Holdings are associated (or correlated) with Imperial Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Imperial Brands PLC has no effect on the direction of Smoore International i.e., Smoore International and Imperial Brands go up and down completely randomly.
Pair Corralation between Smoore International and Imperial Brands
If you would invest 3,011 in Imperial Brands PLC on September 1, 2024 and sell it today you would earn a total of 328.00 from holding Imperial Brands PLC or generate 10.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Smoore International Holdings vs. Imperial Brands PLC
Performance |
| Timeline |
| Smoore International |
| Imperial Brands PLC |
Smoore International and Imperial Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Smoore International and Imperial Brands
The main advantage of trading using opposite Smoore International and Imperial Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Smoore International position performs unexpectedly, Imperial Brands 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 Imperial Brands will offset losses from the drop in Imperial Brands' long position.| Smoore International vs. Imperial Brands PLC | Smoore International vs. Turning Point Brands | Smoore International vs. Universal | Smoore International vs. Japan Tobacco ADR |
| Imperial Brands vs. Signet International Holdings | Imperial Brands vs. National Beverage Corp | Imperial Brands vs. PT Astra International | Imperial Brands vs. Vita Coco |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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