Correlation Between SMC Corp and SMC Corp

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

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

Diversification Opportunities for SMC Corp and SMC Corp

0.97

Correlation Coefficient

SMC Corp  SMC Corp

Almost no diversification

The 3 months correlation between SMC and SMC is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding SMC Corp and SMC Corp Japan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SMC Corp Japan and SMC Corp 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 Corp are associated (or correlated) with SMC Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SMC Corp Japan has no effect on the direction of SMC Corp i.e., SMC Corp and SMC Corp go up and down completely randomly.

Pair Corralation between SMC Corp and SMC Corp

Assuming the 90 days horizon SMC Corp is expected to generate 1.63 times more return on investment than SMC Corp. However, SMC Corp is 1.63 times more volatile than SMC Corp Japan. It trades about -0.11 of its potential returns per unit of risk. SMC Corp Japan is currently generating about -0.19 per unit of risk. If you would invest  42,685  in SMC Corp on November 20, 2024 and sell it today you would lose (8,085) from holding SMC Corp or give up 18.94% of portfolio value over 90 days.

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

SMC Corp  vs.  SMC Corp Japan

SMC Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days SMC Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's fundamental indicators remain nearly stable which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

SMC Corp Japan

Risk-Adjusted Performance

Very Weak

Over the last 90 days SMC Corp Japan has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with SMC Corp and SMC Corp

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

The idea behind SMC Corp and SMC Corp Japan 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.