Correlation Between SNM Gobal and Hiru

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

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

Diversification Opportunities for SNM Gobal and Hiru

-0.45

Correlation Coefficient

SNM Gobal  Hiru

Very good diversification

The 3 months correlation between SNM and Hiru is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding SNM Gobal Holdings and Hiru Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hiru and SNM Gobal 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 SNM Gobal Holdings are associated (or correlated) with Hiru. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hiru has no effect on the direction of SNM Gobal i.e., SNM Gobal and Hiru go up and down completely randomly.

Pair Corralation between SNM Gobal and Hiru

Given the investment horizon of 90 days SNM Gobal Holdings is expected to generate 9.13 times more return on investment than Hiru. However, SNM Gobal is 9.13 times more volatile than Hiru Corporation. It trades about 0.15 of its potential returns per unit of risk. Hiru Corporation is currently generating about 0.05 per unit of risk. If you would invest  0.01  in SNM Gobal Holdings on December 4, 2024 and sell it today you would earn a total of  0.00  from holding SNM Gobal Holdings or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	50.2%
Values	Daily Returns

SNM Gobal Holdings  vs.  Hiru Corp.

SNM Gobal Holdings

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SNM Gobal Holdings are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting primary indicators, SNM Gobal displayed solid returns over the last few months and may actually be approaching a breakup point.

Hiru

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hiru Corporation has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with SNM Gobal and Hiru

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

The idea behind SNM Gobal Holdings and Hiru Corporation 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.