Correlation Between House Of and SM Investments
Can any of the company-specific risk be diversified away by investing in both House Of and SM Investments 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 House Of and SM Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between House of Investments and SM Investments Corp, you can compare the effects of market volatilities on House Of and SM Investments 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 House Of with a short position of SM Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of House Of and SM Investments.
Diversification Opportunities for House Of and SM Investments
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between House and SM Investments is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding House of Investments and SM Investments Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SM Investments Corp and House Of 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 House of Investments are associated (or correlated) with SM Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SM Investments Corp has no effect on the direction of House Of i.e., House Of and SM Investments go up and down completely randomly.
Pair Corralation between House Of and SM Investments
Assuming the 90 days trading horizon House of Investments is expected to generate 0.64 times more return on investment than SM Investments. However, House of Investments is 1.55 times less risky than SM Investments. It trades about 0.09 of its potential returns per unit of risk. SM Investments Corp is currently generating about -0.04 per unit of risk. If you would invest 346.00 in House of Investments on September 16, 2024 and sell it today you would earn a total of 11.00 from holding House of Investments or generate 3.18% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 43.08% |
Values | Daily Returns |
House of Investments vs. SM Investments Corp
Performance |
Timeline |
House of Investments |
SM Investments Corp |
House Of and SM Investments Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with House Of and SM Investments
The main advantage of trading using opposite House Of and SM Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if House Of position performs unexpectedly, SM Investments 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 SM Investments will offset losses from the drop in SM Investments' long position.House Of vs. Converge Information Communications | House Of vs. Allhome Corp | House Of vs. Metro Retail Stores |
SM Investments vs. Ayala Corp | SM Investments vs. Alliance Global Group | SM Investments vs. DMCI Holdings |
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.
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