Correlation Between SMA Solar and Kaufman Et
Can any of the company-specific risk be diversified away by investing in both SMA Solar and Kaufman Et 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 SMA Solar and Kaufman Et into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SMA Solar Technology and Kaufman Et Broad, you can compare the effects of market volatilities on SMA Solar and Kaufman Et 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 SMA Solar with a short position of Kaufman Et. Check out your portfolio center. Please also check ongoing floating volatility patterns of SMA Solar and Kaufman Et.
Diversification Opportunities for SMA Solar and Kaufman Et
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between SMA and Kaufman is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding SMA Solar Technology and Kaufman Et Broad in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kaufman Et Broad and SMA Solar 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 SMA Solar Technology are associated (or correlated) with Kaufman Et. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kaufman Et Broad has no effect on the direction of SMA Solar i.e., SMA Solar and Kaufman Et go up and down completely randomly.
Pair Corralation between SMA Solar and Kaufman Et
Assuming the 90 days trading horizon SMA Solar Technology is expected to under-perform the Kaufman Et. In addition to that, SMA Solar is 2.02 times more volatile than Kaufman Et Broad. It trades about -0.08 of its total potential returns per unit of risk. Kaufman Et Broad is currently generating about 0.05 per unit of volatility. If you would invest 2,413 in Kaufman Et Broad on November 7, 2024 and sell it today you would earn a total of 975.00 from holding Kaufman Et Broad or generate 40.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
SMA Solar Technology vs. Kaufman Et Broad
Performance |
| Timeline |
| SMA Solar Technology |
| Kaufman Et Broad |
SMA Solar and Kaufman Et Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SMA Solar and Kaufman Et
The main advantage of trading using opposite SMA Solar and Kaufman Et positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SMA Solar position performs unexpectedly, Kaufman Et 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 Kaufman Et will offset losses from the drop in Kaufman Et's long position.| SMA Solar vs. Wheaton Precious Metals | SMA Solar vs. Coeur Mining | SMA Solar vs. Eastinco Mining Exploration | SMA Solar vs. URU Metals |
| Kaufman Et vs. The Mercantile Investment | Kaufman Et vs. Jupiter Fund Management | Kaufman Et vs. Herald Investment Trust | Kaufman Et vs. Flow Traders NV |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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