Correlation Between Smithson Investment and Andrews Sykes
Can any of the company-specific risk be diversified away by investing in both Smithson Investment and Andrews Sykes 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 Smithson Investment and Andrews Sykes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Smithson Investment Trust and Andrews Sykes Group, you can compare the effects of market volatilities on Smithson Investment and Andrews Sykes 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 Smithson Investment with a short position of Andrews Sykes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Smithson Investment and Andrews Sykes.
Diversification Opportunities for Smithson Investment and Andrews Sykes
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Smithson and Andrews is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Smithson Investment Trust and Andrews Sykes Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Andrews Sykes Group and Smithson Investment 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 Smithson Investment Trust are associated (or correlated) with Andrews Sykes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Andrews Sykes Group has no effect on the direction of Smithson Investment i.e., Smithson Investment and Andrews Sykes go up and down completely randomly.
Pair Corralation between Smithson Investment and Andrews Sykes
Assuming the 90 days trading horizon Smithson Investment Trust is expected to generate 0.98 times more return on investment than Andrews Sykes. However, Smithson Investment Trust is 1.02 times less risky than Andrews Sykes. It trades about 0.07 of its potential returns per unit of risk. Andrews Sykes Group is currently generating about -0.06 per unit of risk. If you would invest 138,600 in Smithson Investment Trust on September 3, 2024 and sell it today you would earn a total of 11,800 from holding Smithson Investment Trust or generate 8.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Smithson Investment Trust vs. Andrews Sykes Group
Performance |
| Timeline |
| Smithson Investment Trust |
| Andrews Sykes Group |
Smithson Investment and Andrews Sykes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Smithson Investment and Andrews Sykes
The main advantage of trading using opposite Smithson Investment and Andrews Sykes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Smithson Investment position performs unexpectedly, Andrews Sykes 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 Andrews Sykes will offset losses from the drop in Andrews Sykes' long position.| Smithson Investment vs. SupplyMe Capital PLC | Smithson Investment vs. 88 Energy | Smithson Investment vs. Vodafone Group PLC | Smithson Investment vs. Vodafone Group PLC |
| Andrews Sykes vs. Cairo Communication SpA | Andrews Sykes vs. CleanTech Lithium plc | Andrews Sykes vs. Naked Wines plc | Andrews Sykes vs. Air Products Chemicals |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences |