Correlation Between SMX Public and International Consolidated
Can any of the company-specific risk be diversified away by investing in both SMX Public and International Consolidated 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 International Consolidated 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 International Consolidated Companies, you can compare the effects of market volatilities on SMX Public and International Consolidated 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 International Consolidated. Check out your portfolio center. Please also check ongoing floating volatility patterns of SMX Public and International Consolidated.
Diversification Opportunities for SMX Public and International Consolidated
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SMX and International is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding SMX Public Limited and International Consolidated Com in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Consolidated 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 International Consolidated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Consolidated has no effect on the direction of SMX Public i.e., SMX Public and International Consolidated go up and down completely randomly.
Pair Corralation between SMX Public and International Consolidated
Considering the 90-day investment horizon SMX Public Limited is expected to under-perform the International Consolidated. But the stock apears to be less risky and, when comparing its historical volatility, SMX Public Limited is 16.94 times less risky than International Consolidated. The stock trades about -0.09 of its potential returns per unit of risk. The International Consolidated Companies is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 20.00 in International Consolidated Companies on September 3, 2024 and sell it today you would lose (18.99) from holding International Consolidated Companies or give up 94.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SMX Public Limited vs. International Consolidated Com
Performance |
| Timeline |
| SMX Public Limited |
| International Consolidated |
SMX Public and International Consolidated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SMX Public and International Consolidated
The main advantage of trading using opposite SMX Public and International Consolidated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SMX Public position performs unexpectedly, International Consolidated 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 International Consolidated will offset losses from the drop in International Consolidated's long position.| SMX Public vs. Team Inc | SMX Public vs. Lichen China Limited | SMX Public vs. System1 | SMX Public vs. Eastman Kodak Co |
| International Consolidated vs. Cintas | International Consolidated vs. Thomson Reuters Corp | International Consolidated vs. Global Payments | International Consolidated vs. RB Global |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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