Correlation Between SM Investments and Altus Property

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

By analyzing existing cross correlation between SM Investments Corp and Altus Property Ventures, you can compare the effects of market volatilities on SM Investments and Altus Property 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 SM Investments with a short position of Altus Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of SM Investments and Altus Property.

Diversification Opportunities for SM Investments and Altus Property

-0.06

Correlation Coefficient

SM Investments  Altus Property

Good diversification

The 3 months correlation between SM Investments and Altus is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding SM Investments Corp and Altus Property Ventures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altus Property Ventures and SM Investments 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 SM Investments Corp are associated (or correlated) with Altus Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altus Property Ventures has no effect on the direction of SM Investments i.e., SM Investments and Altus Property go up and down completely randomly.

Pair Corralation between SM Investments and Altus Property

Assuming the 90 days trading horizon SM Investments Corp is expected to generate 0.39 times more return on investment than Altus Property. However, SM Investments Corp is 2.57 times less risky than Altus Property. It trades about 0.04 of its potential returns per unit of risk. Altus Property Ventures is currently generating about 0.01 per unit of risk. If you would invest  82,707  in SM Investments Corp on September 4, 2024 and sell it today you would earn a total of  9,093  from holding SM Investments Corp or generate 10.99% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	85.12%
Values	Daily Returns

SM Investments Corp  vs.  Altus Property Ventures

SM Investments Corp

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in SM Investments Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, SM Investments is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Altus Property Ventures

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Altus Property Ventures are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Altus Property is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with SM Investments and Altus Property

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

The idea behind SM Investments Corp and Altus Property Ventures 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.