Correlation Between SMC Investment and CEO Group

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

By analyzing existing cross correlation between SMC Investment Trading and CEO Group JSC, you can compare the effects of market volatilities on SMC Investment and CEO Group 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 SMC Investment with a short position of CEO Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of SMC Investment and CEO Group.

Diversification Opportunities for SMC Investment and CEO Group

-0.35

Correlation Coefficient

SMC Investment  CEO Group

Very good diversification

The 3 months correlation between SMC and CEO is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding SMC Investment Trading and CEO Group JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CEO Group JSC and SMC Investment 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 SMC Investment Trading are associated (or correlated) with CEO Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CEO Group JSC has no effect on the direction of SMC Investment i.e., SMC Investment and CEO Group go up and down completely randomly.

Pair Corralation between SMC Investment and CEO Group

Assuming the 90 days trading horizon SMC Investment Trading is expected to under-perform the CEO Group. In addition to that, SMC Investment is 1.4 times more volatile than CEO Group JSC. It trades about -0.15 of its total potential returns per unit of risk. CEO Group JSC is currently generating about 0.08 per unit of volatility. If you would invest  1,370,000  in CEO Group JSC on December 19, 2024 and sell it today you would earn a total of  120,000  from holding CEO Group JSC or generate 8.76% return on investment over 90 days.

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

SMC Investment Trading  vs.  CEO Group JSC

SMC Investment Trading

Risk-Adjusted Performance

Very Weak

Over the last 90 days SMC Investment Trading has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's fundamental indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

CEO Group JSC

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in CEO Group JSC are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, CEO Group may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with SMC Investment and CEO Group

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

The idea behind SMC Investment Trading and CEO Group JSC 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.