Correlation Between Smith Nephew and 1mage Software

Can any of the company-specific risk be diversified away by investing in both Smith Nephew and 1mage Software 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 1mage Software 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 1mage Software, you can compare the effects of market volatilities on Smith Nephew and 1mage Software 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 1mage Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of Smith Nephew and 1mage Software.

Diversification Opportunities for Smith Nephew and 1mage Software

0.0

Correlation Coefficient

Smith Nephew  1mage Software

Pay attention - limited upside

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

Pair Corralation between Smith Nephew and 1mage Software

If you would invest  0.02  in 1mage Software on September 9, 2025 and sell it today you would earn a total of  0.00  from holding 1mage Software or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

Smith Nephew SNATS  vs.  1mage Software

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 weak 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.

1mage Software

Risk-Adjusted Performance

Weakest

Over the last 90 days 1mage Software has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, 1mage Software is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Smith Nephew and 1mage Software

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

The idea behind Smith Nephew SNATS and 1mage Software 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.