Correlation Between SMX Public and Seafarer Exploration
Can any of the company-specific risk be diversified away by investing in both SMX Public and Seafarer Exploration 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 Seafarer Exploration 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 Seafarer Exploration, you can compare the effects of market volatilities on SMX Public and Seafarer Exploration 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 Seafarer Exploration. Check out your portfolio center. Please also check ongoing floating volatility patterns of SMX Public and Seafarer Exploration.
Diversification Opportunities for SMX Public and Seafarer Exploration
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SMX and Seafarer is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding SMX Public Limited and Seafarer Exploration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seafarer Exploration 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 Seafarer Exploration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seafarer Exploration has no effect on the direction of SMX Public i.e., SMX Public and Seafarer Exploration go up and down completely randomly.
Pair Corralation between SMX Public and Seafarer Exploration
Considering the 90-day investment horizon SMX Public Limited is expected to generate 8.1 times more return on investment than Seafarer Exploration. However, SMX Public is 8.1 times more volatile than Seafarer Exploration. It trades about 0.08 of its potential returns per unit of risk. Seafarer Exploration is currently generating about 0.05 per unit of risk. If you would invest 627.00 in SMX Public Limited on October 23, 2024 and sell it today you would lose (174.00) from holding SMX Public Limited or give up 27.75% 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. Seafarer Exploration
Performance |
| Timeline |
| SMX Public Limited |
| Seafarer Exploration |
SMX Public and Seafarer Exploration Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SMX Public and Seafarer Exploration
The main advantage of trading using opposite SMX Public and Seafarer Exploration positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SMX Public position performs unexpectedly, Seafarer Exploration 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 Seafarer Exploration will offset losses from the drop in Seafarer Exploration's long position.| SMX Public vs. Team Inc | SMX Public vs. Lichen China Limited | SMX Public vs. System1 | SMX Public vs. Eastman Kodak Co |
| Seafarer Exploration vs. BIO Key International | Seafarer Exploration vs. LogicMark | Seafarer Exploration vs. Knightscope | Seafarer Exploration vs. Guardforce AI Co |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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