Correlation Between SMA Solar and Abrdn Property
Can any of the company-specific risk be diversified away by investing in both SMA Solar and Abrdn Property 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 Abrdn Property 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 abrdn Property Income, you can compare the effects of market volatilities on SMA Solar and Abrdn Property 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 Abrdn Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of SMA Solar and Abrdn Property.
Diversification Opportunities for SMA Solar and Abrdn Property
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SMA and Abrdn is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding SMA Solar Technology and abrdn Property Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on abrdn Property Income 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 Abrdn Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of abrdn Property Income has no effect on the direction of SMA Solar i.e., SMA Solar and Abrdn Property go up and down completely randomly.
Pair Corralation between SMA Solar and Abrdn Property
Assuming the 90 days trading horizon SMA Solar Technology is expected to generate 8.99 times more return on investment than Abrdn Property. However, SMA Solar is 8.99 times more volatile than abrdn Property Income. It trades about 0.11 of its potential returns per unit of risk. abrdn Property Income is currently generating about 0.05 per unit of risk. If you would invest 1,392 in SMA Solar Technology on September 13, 2024 and sell it today you would earn a total of 120.00 from holding SMA Solar Technology or generate 8.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SMA Solar Technology vs. abrdn Property Income
Performance |
| Timeline |
| SMA Solar Technology |
| abrdn Property Income |
SMA Solar and Abrdn Property Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SMA Solar and Abrdn Property
The main advantage of trading using opposite SMA Solar and Abrdn Property positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SMA Solar position performs unexpectedly, Abrdn Property 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 Abrdn Property will offset losses from the drop in Abrdn Property's long position.| SMA Solar vs. Samsung Electronics Co | SMA Solar vs. Samsung Electronics Co | SMA Solar vs. Hyundai Motor | SMA Solar vs. Reliance Industries Ltd |
| Abrdn Property vs. Take Two Interactive Software | Abrdn Property vs. Dolly Varden Silver | Abrdn Property vs. Bisichi Mining PLC | Abrdn Property vs. Gaztransport et Technigaz |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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