Correlation Between SM Investments and PAO NOVATEK

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

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

Diversification Opportunities for SM Investments and PAO NOVATEK

0.0

Correlation Coefficient

SM Investments  PAO NOVATEK

Pay attention - limited upside

The 3 months correlation between SVTMF and PAO is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SM Investments and PAO NOVATEK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PAO NOVATEK and SM Investments 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 SM Investments are associated (or correlated) with PAO NOVATEK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PAO NOVATEK has no effect on the direction of SM Investments i.e., SM Investments and PAO NOVATEK go up and down completely randomly.

Pair Corralation between SM Investments and PAO NOVATEK

If you would invest  2,229  in PAO NOVATEK on October 10, 2024 and sell it today you would earn a total of  0.00  from holding PAO NOVATEK or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	5.0%
Values	Daily Returns

SM Investments  vs.  PAO NOVATEK

SM Investments

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SM Investments are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak primary indicators, SM Investments reported solid returns over the last few months and may actually be approaching a breakup point.

PAO NOVATEK

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PAO NOVATEK has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable forward-looking signals, PAO NOVATEK is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with SM Investments and PAO NOVATEK

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

The idea behind SM Investments and PAO NOVATEK 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.