Correlation Between Vestas Wind and SMC Corp
Can any of the company-specific risk be diversified away by investing in both Vestas Wind and SMC Corp 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 Vestas Wind and SMC Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vestas Wind Systems and SMC Corp Japan, you can compare the effects of market volatilities on Vestas Wind and SMC Corp 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 Vestas Wind with a short position of SMC Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vestas Wind and SMC Corp.
Diversification Opportunities for Vestas Wind and SMC Corp
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Vestas and SMC is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Vestas Wind Systems and SMC Corp Japan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SMC Corp Japan and Vestas Wind 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 Vestas Wind Systems are associated (or correlated) with SMC Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SMC Corp Japan has no effect on the direction of Vestas Wind i.e., Vestas Wind and SMC Corp go up and down completely randomly.
Pair Corralation between Vestas Wind and SMC Corp
Assuming the 90 days horizon Vestas Wind Systems is expected to under-perform the SMC Corp. In addition to that, Vestas Wind is 2.96 times more volatile than SMC Corp Japan. It trades about -0.3 of its total potential returns per unit of risk. SMC Corp Japan is currently generating about 0.16 per unit of volatility. If you would invest 2,063 in SMC Corp Japan on August 25, 2024 and sell it today you would earn a total of 101.00 from holding SMC Corp Japan or generate 4.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vestas Wind Systems vs. SMC Corp Japan
Performance |
| Timeline |
| Vestas Wind Systems |
| SMC Corp Japan |
Vestas Wind and SMC Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vestas Wind and SMC Corp
The main advantage of trading using opposite Vestas Wind and SMC Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vestas Wind position performs unexpectedly, SMC Corp 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 SMC Corp will offset losses from the drop in SMC Corp's long position.| Vestas Wind vs. Aumann AG | Vestas Wind vs. Arista Power | Vestas Wind vs. Atlas Copco AB | Vestas Wind vs. American Commerce Solutions |
| SMC Corp vs. Schneider Electric SE | SMC Corp vs. Atlas Copco AB | SMC Corp vs. Fanuc | SMC Corp vs. Sandvik AB |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios |