Correlation Between Smith Nephew and Nano X

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

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

Diversification Opportunities for Smith Nephew and Nano X

-0.53

Correlation Coefficient

Smith Nephew  Nano X

Excellent diversification

The 3 months correlation between Smith and Nano is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Smith Nephew SNATS and Nano X Imaging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nano X Imaging and Smith Nephew 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 Smith Nephew SNATS are associated (or correlated) with Nano X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nano X Imaging has no effect on the direction of Smith Nephew i.e., Smith Nephew and Nano X go up and down completely randomly.

Pair Corralation between Smith Nephew and Nano X

Considering the 90-day investment horizon Smith Nephew SNATS is expected to generate 0.64 times more return on investment than Nano X. However, Smith Nephew SNATS is 1.57 times less risky than Nano X. It trades about 0.14 of its potential returns per unit of risk. Nano X Imaging is currently generating about -0.1 per unit of risk. If you would invest  3,054  in Smith Nephew SNATS on August 4, 2025 and sell it today you would earn a total of  628.00  from holding Smith Nephew SNATS or generate 20.56% return on investment over 90 days.

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

Smith Nephew SNATS  vs.  Nano X Imaging

Smith Nephew SNATS

Risk-Adjusted Performance

Good

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

Nano X Imaging

Risk-Adjusted Performance

Weakest

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

Pair Trading with Smith Nephew and Nano X

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

The idea behind Smith Nephew SNATS and Nano X Imaging 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.