Correlation Between Intevac and Smith AO

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

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

Diversification Opportunities for Intevac and Smith AO

-0.13

Correlation Coefficient

Intevac  Smith AO

Good diversification

The 3 months correlation between Intevac and Smith is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Intevac and Smith AO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Smith AO and Intevac 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 Intevac are associated (or correlated) with Smith AO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Smith AO has no effect on the direction of Intevac i.e., Intevac and Smith AO go up and down completely randomly.

Pair Corralation between Intevac and Smith AO

Given the investment horizon of 90 days Intevac is expected to generate 1.5 times more return on investment than Smith AO. However, Intevac is 1.5 times more volatile than Smith AO. It trades about 0.09 of its potential returns per unit of risk. Smith AO is currently generating about 0.14 per unit of risk. If you would invest  333.00  in Intevac on October 26, 2024 and sell it today you would earn a total of  11.00  from holding Intevac or generate 3.3% return on investment over 90 days.

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

Intevac  vs.  Smith AO

Intevac

Risk-Adjusted Performance

2 of 100

Weak

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

Smith AO

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Smith AO has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Intevac and Smith AO

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

The idea behind Intevac and Smith AO 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.