Correlation Between SMX Public and PFSweb

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

Diversification Opportunities for SMX Public and PFSweb

-0.67

Correlation Coefficient

SMX Public  PFSweb

Excellent diversification

The 3 months correlation between SMX and PFSweb is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding SMX Public Limited and PFSweb Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PFSweb Inc 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 PFSweb. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PFSweb Inc has no effect on the direction of SMX Public i.e., SMX Public and PFSweb go up and down completely randomly.

Pair Corralation between SMX Public and PFSweb

If you would invest  452.00  in PFSweb Inc on September 12, 2024 and sell it today you would earn a total of  0.00  from holding PFSweb Inc or generate 0.0% return on investment over 90 days.

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

SMX Public Limited  vs.  PFSweb Inc

SMX Public Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SMX Public Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's primary indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

PFSweb Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PFSweb Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, PFSweb is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with SMX Public and PFSweb

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

The idea behind SMX Public Limited and PFSweb Inc 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.