Correlation Between Smith Micro and Infobird

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

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

Diversification Opportunities for Smith Micro and Infobird

-0.1

Correlation Coefficient

Smith Micro  Infobird

Good diversification

The 3 months correlation between Smith and Infobird is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Smith Micro Software and Infobird Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Infobird and Smith Micro 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 Smith Micro Software are associated (or correlated) with Infobird. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Infobird has no effect on the direction of Smith Micro i.e., Smith Micro and Infobird go up and down completely randomly.

Pair Corralation between Smith Micro and Infobird

Given the investment horizon of 90 days Smith Micro Software is expected to generate 0.69 times more return on investment than Infobird. However, Smith Micro Software is 1.44 times less risky than Infobird. It trades about -0.03 of its potential returns per unit of risk. Infobird Co is currently generating about -0.04 per unit of risk. If you would invest  1,968  in Smith Micro Software on September 28, 2024 and sell it today you would lose (1,823) from holding Smith Micro Software or give up 92.63% of portfolio value over 90 days.

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

Smith Micro Software  vs.  Infobird Co

Smith Micro Software

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Smith Micro Software are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite fairly fragile basic indicators, Smith Micro demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Infobird

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Infobird Co are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak fundamental drivers, Infobird exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Smith Micro and Infobird

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

The idea behind Smith Micro Software and Infobird Co 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.