Correlation Between Greenland Acquisition and SMC Corp

Can any of the company-specific risk be diversified away by investing in both Greenland Acquisition and SMC Corp 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 Greenland Acquisition and SMC Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Greenland Acquisition Corp and SMC Corp Japan, you can compare the effects of market volatilities on Greenland Acquisition and SMC Corp 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 Greenland Acquisition with a short position of SMC Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Greenland Acquisition and SMC Corp.

Diversification Opportunities for Greenland Acquisition and SMC Corp

0.3

Correlation Coefficient

Greenland Acquisition  SMC Corp

Weak diversification

The 3 months correlation between Greenland and SMC is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Greenland Acquisition Corp and SMC Corp Japan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SMC Corp Japan and Greenland Acquisition 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 Greenland Acquisition Corp are associated (or correlated) with SMC Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SMC Corp Japan has no effect on the direction of Greenland Acquisition i.e., Greenland Acquisition and SMC Corp go up and down completely randomly.

Pair Corralation between Greenland Acquisition and SMC Corp

Given the investment horizon of 90 days Greenland Acquisition Corp is expected to generate 3.46 times more return on investment than SMC Corp. However, Greenland Acquisition is 3.46 times more volatile than SMC Corp Japan. It trades about 0.03 of its potential returns per unit of risk. SMC Corp Japan is currently generating about 0.0 per unit of risk. If you would invest  200.00  in Greenland Acquisition Corp on September 24, 2024 and sell it today you would lose (6.00) from holding Greenland Acquisition Corp or give up 3.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	99.8%
Values	Daily Returns

Greenland Acquisition Corp  vs.  SMC Corp Japan

Greenland Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Greenland Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

SMC Corp Japan

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SMC Corp Japan has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Greenland Acquisition and SMC Corp

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

The idea behind Greenland Acquisition Corp and SMC Corp Japan 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.