Correlation Between GBX International and SMS Co,
Can any of the company-specific risk be diversified away by investing in both GBX International and SMS Co, 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 GBX International and SMS Co, into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GBX International Group and SMS Co,, you can compare the effects of market volatilities on GBX International and SMS Co, 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 GBX International with a short position of SMS Co,. Check out your portfolio center. Please also check ongoing floating volatility patterns of GBX International and SMS Co,.
Diversification Opportunities for GBX International and SMS Co,
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GBX and SMS is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding GBX International Group and SMS Co, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SMS Co, and GBX International 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 GBX International Group are associated (or correlated) with SMS Co,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SMS Co, has no effect on the direction of GBX International i.e., GBX International and SMS Co, go up and down completely randomly.
Pair Corralation between GBX International and SMS Co,
Given the investment horizon of 90 days GBX International Group is expected to generate 23.67 times more return on investment than SMS Co,. However, GBX International is 23.67 times more volatile than SMS Co,. It trades about 0.09 of its potential returns per unit of risk. SMS Co, is currently generating about -0.02 per unit of risk. If you would invest 0.30 in GBX International Group on September 26, 2024 and sell it today you would lose (0.28) from holding GBX International Group or give up 93.33% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
GBX International Group vs. SMS Co,
Performance |
Timeline |
GBX International |
SMS Co, |
GBX International and SMS Co, Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with GBX International and SMS Co,
The main advantage of trading using opposite GBX International and SMS Co, positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GBX International position performs unexpectedly, SMS Co, 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 SMS Co, will offset losses from the drop in SMS Co,'s long position.GBX International vs. Marchex | GBX International vs. Snipp Interactive | GBX International vs. Emerald Expositions Events |
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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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