Correlation Between MeHow Innovative and Smith Nephew

Can any of the company-specific risk be diversified away by investing in both MeHow Innovative and Smith Nephew 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 MeHow Innovative and Smith Nephew into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between MeHow Innovative Ltd and Smith Nephew SNATS, you can compare the effects of market volatilities on MeHow Innovative and Smith Nephew 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 MeHow Innovative with a short position of Smith Nephew. Check out your portfolio center. Please also check ongoing floating volatility patterns of MeHow Innovative and Smith Nephew.

Diversification Opportunities for MeHow Innovative and Smith Nephew

0.71

Correlation Coefficient

MeHow Innovative  Smith Nephew

Poor diversification

The 3 months correlation between MeHow and Smith is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding MeHow Innovative Ltd and Smith Nephew SNATS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Smith Nephew SNATS and MeHow Innovative 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 MeHow Innovative Ltd are associated (or correlated) with Smith Nephew. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Smith Nephew SNATS has no effect on the direction of MeHow Innovative i.e., MeHow Innovative and Smith Nephew go up and down completely randomly.

Pair Corralation between MeHow Innovative and Smith Nephew

Assuming the 90 days trading horizon MeHow Innovative Ltd is expected to under-perform the Smith Nephew. In addition to that, MeHow Innovative is 1.36 times more volatile than Smith Nephew SNATS. It trades about -0.11 of its total potential returns per unit of risk. Smith Nephew SNATS is currently generating about -0.1 per unit of volatility. If you would invest  3,808  in Smith Nephew SNATS on September 8, 2025 and sell it today you would lose (460.00) from holding Smith Nephew SNATS or give up 12.08% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	92.31%
Values	Daily Returns

MeHow Innovative Ltd  vs.  Smith Nephew SNATS

MeHow Innovative

Risk-Adjusted Performance

Weakest

Over the last 90 days MeHow Innovative Ltd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2026. The current disturbance may also be a sign of long term up-swing for the company investors.

Smith Nephew SNATS

Risk-Adjusted Performance

Weakest

Over the last 90 days Smith Nephew SNATS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest conflicting performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with MeHow Innovative and Smith Nephew

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

The idea behind MeHow Innovative Ltd and Smith Nephew SNATS 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.