Correlation Between SMC Corp and 1StdibsCom

Can any of the company-specific risk be diversified away by investing in both SMC Corp and 1StdibsCom 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 SMC Corp and 1StdibsCom into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SMC Corp Japan and 1StdibsCom, you can compare the effects of market volatilities on SMC Corp and 1StdibsCom 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 SMC Corp with a short position of 1StdibsCom. Check out your portfolio center. Please also check ongoing floating volatility patterns of SMC Corp and 1StdibsCom.

Diversification Opportunities for SMC Corp and 1StdibsCom

-0.31

Correlation Coefficient

SMC Corp  1StdibsCom

Very good diversification

The 3 months correlation between SMC and 1StdibsCom is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding SMC Corp Japan and 1StdibsCom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 1StdibsCom and SMC Corp 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 SMC Corp Japan are associated (or correlated) with 1StdibsCom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 1StdibsCom has no effect on the direction of SMC Corp i.e., SMC Corp and 1StdibsCom go up and down completely randomly.

Pair Corralation between SMC Corp and 1StdibsCom

Assuming the 90 days horizon SMC Corp Japan is expected to under-perform the 1StdibsCom. But the pink sheet apears to be less risky and, when comparing its historical volatility, SMC Corp Japan is 1.32 times less risky than 1StdibsCom. The pink sheet trades about -0.04 of its potential returns per unit of risk. The 1StdibsCom is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  249.00  in 1StdibsCom on May 17, 2025 and sell it today you would earn a total of  14.00  from holding 1StdibsCom or generate 5.62% return on investment over 90 days.

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

SMC Corp Japan  vs.  1StdibsCom

SMC Corp Japan

Risk-Adjusted Performance

Weakest

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 fairly strong basic indicators, SMC Corp is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

1StdibsCom

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in 1StdibsCom are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady fundamental drivers, 1StdibsCom may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with SMC Corp and 1StdibsCom

The main advantage of trading using opposite SMC Corp and 1StdibsCom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SMC Corp position performs unexpectedly, 1StdibsCom 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 1StdibsCom will offset losses from the drop in 1StdibsCom's long position.

The idea behind SMC Corp Japan and 1StdibsCom 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.