Correlation Between SMX Public and Ijj
Can any of the company-specific risk be diversified away by investing in both SMX Public and Ijj 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 Ijj 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 Ijj Corporation, you can compare the effects of market volatilities on SMX Public and Ijj 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 Ijj. Check out your portfolio center. Please also check ongoing floating volatility patterns of SMX Public and Ijj.
Diversification Opportunities for SMX Public and Ijj
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between SMX and Ijj is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding SMX Public Limited and Ijj Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ijj Corporation 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 Ijj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ijj Corporation has no effect on the direction of SMX Public i.e., SMX Public and Ijj go up and down completely randomly.
Pair Corralation between SMX Public and Ijj
Considering the 90-day investment horizon SMX Public Limited is expected to under-perform the Ijj. But the stock apears to be less risky and, when comparing its historical volatility, SMX Public Limited is 1.37 times less risky than Ijj. The stock trades about -0.1 of its potential returns per unit of risk. The Ijj Corporation is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 0.03 in Ijj Corporation on August 29, 2024 and sell it today you would earn a total of 0.02 from holding Ijj Corporation or generate 66.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SMX Public Limited vs. Ijj Corp.
Performance |
| Timeline |
| SMX Public Limited |
| Ijj Corporation |
SMX Public and Ijj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SMX Public and Ijj
The main advantage of trading using opposite SMX Public and Ijj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SMX Public position performs unexpectedly, Ijj 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 Ijj will offset losses from the drop in Ijj's long position.| SMX Public vs. Genpact Limited | SMX Public vs. Broadridge Financial Solutions | SMX Public vs. First Advantage Corp | SMX Public vs. Franklin Covey |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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