Correlation Between SMX Public and CoStar
Can any of the company-specific risk be diversified away by investing in both SMX Public and CoStar 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 CoStar 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 CoStar Group, you can compare the effects of market volatilities on SMX Public and CoStar 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 CoStar. Check out your portfolio center. Please also check ongoing floating volatility patterns of SMX Public and CoStar.
Diversification Opportunities for SMX Public and CoStar
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SMX and CoStar is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding SMX Public Limited and CoStar Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CoStar Group 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 CoStar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CoStar Group has no effect on the direction of SMX Public i.e., SMX Public and CoStar go up and down completely randomly.
Pair Corralation between SMX Public and CoStar
Considering the 90-day investment horizon SMX Public Limited is expected to under-perform the CoStar. In addition to that, SMX Public is 6.67 times more volatile than CoStar Group. It trades about -0.05 of its total potential returns per unit of risk. CoStar Group is currently generating about 0.04 per unit of volatility. If you would invest 6,146 in CoStar Group on March 2, 2024 and sell it today you would earn a total of 1,681 from holding CoStar Group or generate 27.35% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
SMX Public Limited vs. CoStar Group
Performance |
Timeline |
SMX Public Limited |
CoStar Group |
SMX Public and CoStar Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with SMX Public and CoStar
The main advantage of trading using opposite SMX Public and CoStar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SMX Public position performs unexpectedly, CoStar 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 CoStar will offset losses from the drop in CoStar's long position.SMX Public vs. Team Inc | SMX Public vs. Lichen China Limited | SMX Public vs. System1 | SMX Public vs. Eastman Kodak Co |
CoStar vs. Jones Lang LaSalle | CoStar vs. Cushman Wakefield plc | CoStar vs. Colliers International Group | CoStar vs. Newmark Group |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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