Correlation Between SMX Public and First Advantage
Can any of the company-specific risk be diversified away by investing in both SMX Public and First Advantage 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 First Advantage 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 First Advantage Corp, you can compare the effects of market volatilities on SMX Public and First Advantage 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 First Advantage. Check out your portfolio center. Please also check ongoing floating volatility patterns of SMX Public and First Advantage.
Diversification Opportunities for SMX Public and First Advantage
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between SMX and First is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding SMX Public Limited and First Advantage Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Advantage Corp 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 First Advantage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Advantage Corp has no effect on the direction of SMX Public i.e., SMX Public and First Advantage go up and down completely randomly.
Pair Corralation between SMX Public and First Advantage
Considering the 90-day investment horizon SMX Public Limited is expected to generate 20.55 times more return on investment than First Advantage. However, SMX Public is 20.55 times more volatile than First Advantage Corp. It trades about 0.1 of its potential returns per unit of risk. First Advantage Corp is currently generating about 0.05 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 Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SMX Public Limited vs. First Advantage Corp
Performance |
| Timeline |
| SMX Public Limited |
| First Advantage Corp |
SMX Public and First Advantage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SMX Public and First Advantage
The main advantage of trading using opposite SMX Public and First Advantage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SMX Public position performs unexpectedly, First Advantage 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 First Advantage will offset losses from the drop in First Advantage's long position.| SMX Public vs. Team Inc | SMX Public vs. Lichen China Limited | SMX Public vs. System1 | SMX Public vs. Eastman Kodak Co |
| First Advantage vs. Discount Print USA | First Advantage vs. Cass Information Systems | First Advantage vs. Civeo Corp | First Advantage vs. Network 1 Technologies |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
Other Complementary Tools
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |