Correlation Between Smart Share and Rover

Can any of the company-specific risk be diversified away by investing in both Smart Share and Rover 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 Rover 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 Rover Group, you can compare the effects of market volatilities on Smart Share and Rover 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 Rover. Check out your portfolio center. Please also check ongoing floating volatility patterns of Smart Share and Rover.

Diversification Opportunities for Smart Share and Rover

0.25

Correlation Coefficient

Smart Share  Rover

Modest diversification

The 3 months correlation between Smart and Rover is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Smart Share Global and Rover Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rover Group 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 Rover. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rover Group has no effect on the direction of Smart Share i.e., Smart Share and Rover go up and down completely randomly.

Pair Corralation between Smart Share and Rover

If you would invest  52.00  in Smart Share Global on September 19, 2024 and sell it today you would earn a total of  24.00  from holding Smart Share Global or generate 46.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	1.56%
Values	Daily Returns

Smart Share Global  vs.  Rover Group

Smart Share Global

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Smart Share Global are ranked lower than 11 (%) 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.

Rover Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Rover Group has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Rover is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Smart Share and Rover

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

The idea behind Smart Share Global and Rover Group 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..