Correlation Between Pedros List and Smart Share

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

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

Diversification Opportunities for Pedros List and Smart Share

-0.68

Correlation Coefficient

Pedros List  Smart Share

Excellent diversification

The 3 months correlation between Pedros and Smart is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Pedros List and Smart Share Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Smart Share Global and Pedros List 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 Pedros List are associated (or correlated) with Smart Share. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Smart Share Global has no effect on the direction of Pedros List i.e., Pedros List and Smart Share go up and down completely randomly.

Pair Corralation between Pedros List and Smart Share

Given the investment horizon of 90 days Pedros List is expected to generate 4.41 times more return on investment than Smart Share. However, Pedros List is 4.41 times more volatile than Smart Share Global. It trades about 0.02 of its potential returns per unit of risk. Smart Share Global is currently generating about 0.01 per unit of risk. If you would invest  133.00  in Pedros List on September 3, 2024 and sell it today you would lose (132.68) from holding Pedros List or give up 99.76% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	65.66%
Values	Daily Returns

Pedros List  vs.  Smart Share Global

Pedros List

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pedros List has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Pedros List is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Smart Share Global

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Smart Share Global are ranked lower than 5 (%) 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.

Pair Trading with Pedros List and Smart Share

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

The idea behind Pedros List and Smart Share Global 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.