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
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between SMX and First is -0.06. 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
Assuming the 90 days horizon SMX Public Limited is expected to generate 13.66 times more return on investment than First Advantage. However, SMX Public is 13.66 times more volatile than First Advantage Corp. It trades about 0.14 of its potential returns per unit of risk. First Advantage Corp is currently generating about 0.23 per unit of risk. If you would invest 0.75 in SMX Public Limited on August 28, 2024 and sell it today you would lose (0.06) from holding SMX Public Limited or give up 8.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 81.82% |
| 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. Genpact Limited | SMX Public vs. Broadridge Financial Solutions | SMX Public vs. First Advantage Corp | SMX Public vs. Franklin Covey |
| First Advantage vs. ExlService Holdings | First Advantage vs. WNS Holdings | First Advantage vs. Gartner | First Advantage vs. The Hackett Group |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |