Correlation Between Smart Digital and Connected Media

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

By analyzing existing cross correlation between Smart Digital Group and Connected Media Tech, you can compare the effects of market volatilities on Smart Digital and Connected Media 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 Digital with a short position of Connected Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Smart Digital and Connected Media.

Diversification Opportunities for Smart Digital and Connected Media

0.0

Correlation Coefficient

Smart Digital  Connected Media

Pay attention - limited upside

The 3 months correlation between Smart and Connected is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Smart Digital Group and Connected Media Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Connected Media Tech and Smart Digital 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 Digital Group are associated (or correlated) with Connected Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Connected Media Tech has no effect on the direction of Smart Digital i.e., Smart Digital and Connected Media go up and down completely randomly.

Pair Corralation between Smart Digital and Connected Media

If you would invest  598.00  in Smart Digital Group on May 20, 2025 and sell it today you would earn a total of  642.00  from holding Smart Digital Group or generate 107.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Smart Digital Group  vs.  Connected Media Tech

Smart Digital Group

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Smart Digital Group are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very weak fundamental indicators, Smart Digital displayed solid returns over the last few months and may actually be approaching a breakup point.

Connected Media Tech

Risk-Adjusted Performance

Weakest

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

Pair Trading with Smart Digital and Connected Media

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

The idea behind Smart Digital Group and Connected Media Tech 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.

Check out your portfolio center.

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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.