Correlation Between SmartStop Self and ChampionX

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

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

Diversification Opportunities for SmartStop Self and ChampionX

-0.47

Correlation Coefficient

SmartStop Self  ChampionX

Very good diversification

The 3 months correlation between SmartStop and ChampionX is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding SmartStop Self Storage and ChampionX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ChampionX and SmartStop Self 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 SmartStop Self Storage are associated (or correlated) with ChampionX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ChampionX has no effect on the direction of SmartStop Self i.e., SmartStop Self and ChampionX go up and down completely randomly.

Pair Corralation between SmartStop Self and ChampionX

Assuming the 90 days horizon SmartStop Self Storage is expected to generate 0.14 times more return on investment than ChampionX. However, SmartStop Self Storage is 7.11 times less risky than ChampionX. It trades about 0.0 of its potential returns per unit of risk. ChampionX is currently generating about -0.33 per unit of risk. If you would invest  885.00  in SmartStop Self Storage on September 18, 2024 and sell it today you would earn a total of  0.00  from holding SmartStop Self Storage or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.24%
Values	Daily Returns

SmartStop Self Storage  vs.  ChampionX

SmartStop Self Storage

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SmartStop Self Storage has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, SmartStop Self is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

ChampionX

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ChampionX has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical indicators, ChampionX is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with SmartStop Self and ChampionX

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

The idea behind SmartStop Self Storage and ChampionX 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.