Correlation Between Aramark Holdings and SMX Public

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

By analyzing existing cross correlation between Aramark Holdings and SMX Public Limited, you can compare the effects of market volatilities on Aramark Holdings and SMX Public 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 Aramark Holdings with a short position of SMX Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aramark Holdings and SMX Public.

Diversification Opportunities for Aramark Holdings and SMX Public

-0.18

Correlation Coefficient

Aramark Holdings  SMX Public

Good diversification

The 3 months correlation between Aramark and SMX is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Aramark Holdings and SMX Public Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SMX Public Limited and Aramark Holdings 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 Aramark Holdings are associated (or correlated) with SMX Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SMX Public Limited has no effect on the direction of Aramark Holdings i.e., Aramark Holdings and SMX Public go up and down completely randomly.

Pair Corralation between Aramark Holdings and SMX Public

Given the investment horizon of 90 days Aramark Holdings is expected to generate 0.09 times more return on investment than SMX Public. However, Aramark Holdings is 10.93 times less risky than SMX Public. It trades about 0.03 of its potential returns per unit of risk. SMX Public Limited is currently generating about -0.05 per unit of risk. If you would invest  3,188  in Aramark Holdings on October 11, 2024 and sell it today you would earn a total of  497.00  from holding Aramark Holdings or generate 15.59% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Aramark Holdings  vs.  SMX Public Limited

Aramark Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aramark Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent primary indicators, Aramark Holdings is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

SMX Public Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SMX Public Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's primary indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Aramark Holdings and SMX Public

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

The idea behind Aramark Holdings and SMX Public Limited 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.