Correlation Between Team and SMX Public
Can any of the company-specific risk be diversified away by investing in both Team and SMX Public 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 Team and SMX Public into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Team Inc and SMX Public Limited, you can compare the effects of market volatilities on Team and SMX Public 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 Team with a short position of SMX Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of Team and SMX Public.
Diversification Opportunities for Team and SMX Public
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Team and SMX is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Team Inc and SMX Public Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SMX Public Limited and Team 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 Team Inc are associated (or correlated) with SMX Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SMX Public Limited has no effect on the direction of Team i.e., Team and SMX Public go up and down completely randomly.
Pair Corralation between Team and SMX Public
Given the investment horizon of 90 days Team is expected to generate 11.01 times less return on investment than SMX Public. But when comparing it to its historical volatility, Team Inc is 5.99 times less risky than SMX Public. It trades about 0.08 of its potential returns per unit of risk. SMX Public Limited is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 1.66 in SMX Public Limited on December 26, 2024 and sell it today you would earn a total of 2.03 from holding SMX Public Limited or generate 122.29% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 98.33% |
Values | Daily Returns |
Team Inc vs. SMX Public Limited
Performance |
Timeline |
Team Inc |
SMX Public Limited |
Team and SMX Public Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Team and SMX Public
The main advantage of trading using opposite Team and SMX Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Team position performs unexpectedly, SMX Public 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 SMX Public will offset losses from the drop in SMX Public's long position.The idea behind Team Inc and SMX Public Limited 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.SMX Public vs. Siriuspoint | SMX Public vs. Kinsale Capital Group | SMX Public vs. BBB Foods | SMX Public vs. Yoshitsu Co Ltd |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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