Correlation Between SMX Public and Cass Information
Can any of the company-specific risk be diversified away by investing in both SMX Public and Cass Information 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 SMX Public and Cass Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SMX Public Limited and Cass Information Systems, you can compare the effects of market volatilities on SMX Public and Cass Information 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 SMX Public with a short position of Cass Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of SMX Public and Cass Information.
Diversification Opportunities for SMX Public and Cass Information
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SMX and Cass is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding SMX Public Limited and Cass Information Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cass Information Systems and SMX Public 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 SMX Public Limited are associated (or correlated) with Cass Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cass Information Systems has no effect on the direction of SMX Public i.e., SMX Public and Cass Information go up and down completely randomly.
Pair Corralation between SMX Public and Cass Information
Considering the 90-day investment horizon SMX Public Limited is expected to generate 19.57 times more return on investment than Cass Information. However, SMX Public is 19.57 times more volatile than Cass Information Systems. It trades about 0.1 of its potential returns per unit of risk. Cass Information Systems is currently generating about -0.09 per unit of risk. If you would invest 629.00 in SMX Public Limited on October 23, 2024 and sell it today you would lose (93.00) from holding SMX Public Limited or give up 14.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SMX Public Limited vs. Cass Information Systems
Performance |
| Timeline |
| SMX Public Limited |
| Cass Information Systems |
SMX Public and Cass Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SMX Public and Cass Information
The main advantage of trading using opposite SMX Public and Cass Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SMX Public position performs unexpectedly, Cass Information 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 Cass Information will offset losses from the drop in Cass Information's long position.| SMX Public vs. Team Inc | SMX Public vs. Lichen China Limited | SMX Public vs. System1 | SMX Public vs. Eastman Kodak Co |
| Cass Information vs. First Advantage Corp | Cass Information vs. Rentokil Initial PLC | Cass Information vs. CBIZ Inc | Cass Information vs. Civeo Corp |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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