Correlation Between SMA Solar and Atresmedia
Can any of the company-specific risk be diversified away by investing in both SMA Solar and Atresmedia 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 Atresmedia 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 Atresmedia, you can compare the effects of market volatilities on SMA Solar and Atresmedia 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 Atresmedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of SMA Solar and Atresmedia.
Diversification Opportunities for SMA Solar and Atresmedia
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between SMA and Atresmedia is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding SMA Solar Technology and Atresmedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atresmedia 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 Atresmedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atresmedia has no effect on the direction of SMA Solar i.e., SMA Solar and Atresmedia go up and down completely randomly.
Pair Corralation between SMA Solar and Atresmedia
Assuming the 90 days trading horizon SMA Solar Technology is expected to under-perform the Atresmedia. In addition to that, SMA Solar is 2.96 times more volatile than Atresmedia. It trades about -0.07 of its total potential returns per unit of risk. Atresmedia is currently generating about 0.08 per unit of volatility. If you would invest 290.00 in Atresmedia on October 13, 2024 and sell it today you would earn a total of 155.00 from holding Atresmedia or generate 53.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SMA Solar Technology vs. Atresmedia
Performance |
| Timeline |
| SMA Solar Technology |
| Atresmedia |
SMA Solar and Atresmedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SMA Solar and Atresmedia
The main advantage of trading using opposite SMA Solar and Atresmedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SMA Solar position performs unexpectedly, Atresmedia 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 Atresmedia will offset losses from the drop in Atresmedia's long position.| SMA Solar vs. GoldMining | SMA Solar vs. First Majestic Silver | SMA Solar vs. Flow Traders NV | SMA Solar vs. Hecla Mining Co |
| Atresmedia vs. MyHealthChecked Plc | Atresmedia vs. Light Science Technologies | Atresmedia vs. Sartorius Stedim Biotech | Atresmedia vs. SMA Solar Technology |
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 Stocks Directory module to find actively traded stocks across global markets.
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