Correlation Between SM Investments and Citicore Energy

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Can any of the company-specific risk be diversified away by investing in both SM Investments and Citicore Energy 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 Citicore Energy 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 Citicore Energy REIT, you can compare the effects of market volatilities on SM Investments and Citicore Energy 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 Citicore Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of SM Investments and Citicore Energy.

Diversification Opportunities for SM Investments and Citicore Energy

SM InvestmentsCiticoreDiversified AwaySM InvestmentsCiticoreDiversified Away100%
-0.84
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between SM Investments and Citicore is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding SM Investments Corp and Citicore Energy REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citicore Energy REIT 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 Citicore Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citicore Energy REIT has no effect on the direction of SM Investments i.e., SM Investments and Citicore Energy go up and down completely randomly.

Pair Corralation between SM Investments and Citicore Energy

Assuming the 90 days trading horizon SM Investments Corp is expected to under-perform the Citicore Energy. In addition to that, SM Investments is 3.55 times more volatile than Citicore Energy REIT. It trades about -0.06 of its total potential returns per unit of risk. Citicore Energy REIT is currently generating about 0.19 per unit of volatility. If you would invest  295.00  in Citicore Energy REIT on November 16, 2024 and sell it today you would earn a total of  22.00  from holding Citicore Energy REIT or generate 7.46% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthSignificant
Accuracy98.31%
ValuesDaily Returns

SM Investments Corp  vs.  Citicore Energy REIT

 Performance 
JavaScript chart by amCharts 3.21.15NovDec2025 -20-15-10-505
JavaScript chart by amCharts 3.21.15SM CREIT
       Timeline  
SM Investments Corp 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days SM Investments Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb800850900950
Citicore Energy REIT 

Risk-Adjusted Performance

Good

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Citicore Energy REIT are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain technical and fundamental indicators, Citicore Energy may actually be approaching a critical reversion point that can send shares even higher in March 2025.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb2.92.9533.053.13.153.2

SM Investments and Citicore Energy Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-3.79-2.84-1.89-0.940.00.851.722.593.46 0.10.20.30.4
JavaScript chart by amCharts 3.21.15SM CREIT
       Returns  

Pair Trading with SM Investments and Citicore Energy

The main advantage of trading using opposite SM Investments and Citicore Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SM Investments position performs unexpectedly, Citicore Energy 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 Citicore Energy will offset losses from the drop in Citicore Energy's long position.
The idea behind SM Investments Corp and Citicore Energy REIT 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 Transaction History module to view history of all your transactions and understand their impact on performance.

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