Correlation Between SMX Public and WiMi Hologram

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

By analyzing existing cross correlation between SMX Public Limited and WiMi Hologram Cloud, you can compare the effects of market volatilities on SMX Public and WiMi Hologram 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 SMX Public with a short position of WiMi Hologram. Check out your portfolio center. Please also check ongoing floating volatility patterns of SMX Public and WiMi Hologram.

Diversification Opportunities for SMX Public and WiMi Hologram

0.11

Correlation Coefficient

SMX Public  WiMi Hologram

Average diversification

The 3 months correlation between SMX and WiMi is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding SMX Public Limited and WiMi Hologram Cloud in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WiMi Hologram Cloud and SMX Public 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 SMX Public Limited are associated (or correlated) with WiMi Hologram. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WiMi Hologram Cloud has no effect on the direction of SMX Public i.e., SMX Public and WiMi Hologram go up and down completely randomly.

Pair Corralation between SMX Public and WiMi Hologram

Assuming the 90 days horizon SMX Public Limited is expected to generate 2.33 times more return on investment than WiMi Hologram. However, SMX Public is 2.33 times more volatile than WiMi Hologram Cloud. It trades about 0.14 of its potential returns per unit of risk. WiMi Hologram Cloud is currently generating about 0.0 per unit of risk. If you would invest  1.66  in SMX Public Limited on December 26, 2024 and sell it today you would earn a total of  1.34  from holding SMX Public Limited or generate 80.72% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

SMX Public Limited  vs.  WiMi Hologram Cloud

SMX Public Limited

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SMX Public Limited are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, SMX Public showed solid returns over the last few months and may actually be approaching a breakup point.

WiMi Hologram Cloud

Risk-Adjusted Performance

Very Weak

Over the last 90 days WiMi Hologram Cloud has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong primary indicators, WiMi Hologram is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with SMX Public and WiMi Hologram

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

The idea behind SMX Public Limited and WiMi Hologram Cloud 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.

Check out your portfolio center.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.