Correlation Between SM Investments and Puregold Price

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

Diversification Opportunities for SM Investments and Puregold Price

0.85

Correlation Coefficient

SM Investments  Puregold Price

Very poor diversification

The 3 months correlation between SM Investments and Puregold is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding SM Investments Corp and Puregold Price Club in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Puregold Price Club 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 Puregold Price. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Puregold Price Club has no effect on the direction of SM Investments i.e., SM Investments and Puregold Price go up and down completely randomly.

Pair Corralation between SM Investments and Puregold Price

Assuming the 90 days trading horizon SM Investments Corp is expected to under-perform the Puregold Price. But the stock apears to be less risky and, when comparing its historical volatility, SM Investments Corp is 1.08 times less risky than Puregold Price. The stock trades about -0.15 of its potential returns per unit of risk. The Puregold Price Club is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest  3,070  in Puregold Price Club on December 2, 2024 and sell it today you would lose (290.00) from holding Puregold Price Club or give up 9.45% of portfolio value over 90 days.

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

SM Investments Corp  vs.  Puregold Price Club

SM Investments Corp

Risk-Adjusted Performance

Very Weak

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 uncertain performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Puregold Price Club

Risk-Adjusted Performance

Very Weak

Over the last 90 days Puregold Price Club has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest unsteady performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with SM Investments and Puregold Price

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

The idea behind SM Investments Corp and Puregold Price Club 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.