Correlation Between SMX Public and Willdan
Can any of the company-specific risk be diversified away by investing in both SMX Public and Willdan 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 Willdan 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 Willdan Group, you can compare the effects of market volatilities on SMX Public and Willdan 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 Willdan. Check out your portfolio center. Please also check ongoing floating volatility patterns of SMX Public and Willdan.
Diversification Opportunities for SMX Public and Willdan
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SMX and Willdan is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding SMX Public Limited and Willdan Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Willdan Group 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 Willdan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Willdan Group has no effect on the direction of SMX Public i.e., SMX Public and Willdan go up and down completely randomly.
Pair Corralation between SMX Public and Willdan
Assuming the 90 days horizon SMX Public Limited is expected to generate 36.36 times more return on investment than Willdan. However, SMX Public is 36.36 times more volatile than Willdan Group. It trades about 0.13 of its potential returns per unit of risk. Willdan Group is currently generating about 0.04 per unit of risk. If you would invest 0.97 in SMX Public Limited on November 21, 2024 and sell it today you would earn a total of 1.84 from holding SMX Public Limited or generate 189.69% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 77.33% |
Values | Daily Returns |
SMX Public Limited vs. Willdan Group
Performance |
Timeline |
SMX Public Limited |
Willdan Group |
SMX Public and Willdan Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with SMX Public and Willdan
The main advantage of trading using opposite SMX Public and Willdan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SMX Public position performs unexpectedly, Willdan 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 Willdan will offset losses from the drop in Willdan's long position.SMX Public vs. Sapiens International | ||
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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.
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