Correlation Between Smartgiant Technology and Holitech Technology

Can any of the company-specific risk be diversified away by investing in both Smartgiant Technology and Holitech Technology 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 Smartgiant Technology and Holitech Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Smartgiant Technology Co and Holitech Technology Co, you can compare the effects of market volatilities on Smartgiant Technology and Holitech Technology 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 Smartgiant Technology with a short position of Holitech Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Smartgiant Technology and Holitech Technology.

Diversification Opportunities for Smartgiant Technology and Holitech Technology

0.07

Correlation Coefficient

Smartgiant Technology  Holitech Technology

Significant diversification

The 3 months correlation between Smartgiant and Holitech is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Smartgiant Technology Co and Holitech Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Holitech Technology and Smartgiant Technology 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 Smartgiant Technology Co are associated (or correlated) with Holitech Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Holitech Technology has no effect on the direction of Smartgiant Technology i.e., Smartgiant Technology and Holitech Technology go up and down completely randomly.

Pair Corralation between Smartgiant Technology and Holitech Technology

Assuming the 90 days trading horizon Smartgiant Technology Co is expected to generate 0.94 times more return on investment than Holitech Technology. However, Smartgiant Technology Co is 1.07 times less risky than Holitech Technology. It trades about -0.01 of its potential returns per unit of risk. Holitech Technology Co is currently generating about -0.26 per unit of risk. If you would invest  4,068  in Smartgiant Technology Co on October 23, 2024 and sell it today you would lose (59.00) from holding Smartgiant Technology Co or give up 1.45% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

Smartgiant Technology Co  vs.  Holitech Technology Co

Smartgiant Technology

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Smartgiant Technology Co are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Smartgiant Technology may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Holitech Technology

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Holitech Technology Co are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Holitech Technology sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Smartgiant Technology and Holitech Technology

The main advantage of trading using opposite Smartgiant Technology and Holitech Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Smartgiant Technology position performs unexpectedly, Holitech Technology 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 Holitech Technology will offset losses from the drop in Holitech Technology's long position.

The idea behind Smartgiant Technology Co and Holitech Technology Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.