Correlation Between Smart Share and Hall Of

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

By analyzing existing cross correlation between Smart Share Global and Hall of Fame, you can compare the effects of market volatilities on Smart Share and Hall Of 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 Smart Share with a short position of Hall Of. Check out your portfolio center. Please also check ongoing floating volatility patterns of Smart Share and Hall Of.

Diversification Opportunities for Smart Share and Hall Of

-0.08

Correlation Coefficient

Smart Share  Hall Of

Good diversification

The 3 months correlation between Smart and Hall is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Smart Share Global and Hall of Fame in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hall of Fame and Smart Share 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 Smart Share Global are associated (or correlated) with Hall Of. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hall of Fame has no effect on the direction of Smart Share i.e., Smart Share and Hall Of go up and down completely randomly.

Pair Corralation between Smart Share and Hall Of

Allowing for the 90-day total investment horizon Smart Share is expected to generate 3.43 times less return on investment than Hall Of. But when comparing it to its historical volatility, Smart Share Global is 5.02 times less risky than Hall Of. It trades about 0.13 of its potential returns per unit of risk. Hall of Fame is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  0.96  in Hall of Fame on September 13, 2024 and sell it today you would lose (0.45) from holding Hall of Fame or give up 46.87% of portfolio value over 90 days.

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

Smart Share Global  vs.  Hall of Fame

Smart Share Global

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Smart Share Global are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very weak primary indicators, Smart Share displayed solid returns over the last few months and may actually be approaching a breakup point.

Hall of Fame

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Hall of Fame are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Hall Of showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Smart Share and Hall Of

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

The idea behind Smart Share Global and Hall of Fame 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.