Correlation Between SMA Solar and BlackRock Frontiers
Can any of the company-specific risk be diversified away by investing in both SMA Solar and BlackRock Frontiers 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 BlackRock Frontiers 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 BlackRock Frontiers Investment, you can compare the effects of market volatilities on SMA Solar and BlackRock Frontiers 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 BlackRock Frontiers. Check out your portfolio center. Please also check ongoing floating volatility patterns of SMA Solar and BlackRock Frontiers.
Diversification Opportunities for SMA Solar and BlackRock Frontiers
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between SMA and BlackRock is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding SMA Solar Technology and BlackRock Frontiers Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BlackRock Frontiers 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 BlackRock Frontiers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BlackRock Frontiers has no effect on the direction of SMA Solar i.e., SMA Solar and BlackRock Frontiers go up and down completely randomly.
Pair Corralation between SMA Solar and BlackRock Frontiers
Assuming the 90 days trading horizon SMA Solar Technology is expected to under-perform the BlackRock Frontiers. In addition to that, SMA Solar is 2.55 times more volatile than BlackRock Frontiers Investment. It trades about -0.12 of its total potential returns per unit of risk. BlackRock Frontiers Investment is currently generating about 0.04 per unit of volatility. If you would invest 15,530 in BlackRock Frontiers Investment on November 3, 2024 and sell it today you would earn a total of 120.00 from holding BlackRock Frontiers Investment or generate 0.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SMA Solar Technology vs. BlackRock Frontiers Investment
Performance |
| Timeline |
| SMA Solar Technology |
| BlackRock Frontiers |
SMA Solar and BlackRock Frontiers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SMA Solar and BlackRock Frontiers
The main advantage of trading using opposite SMA Solar and BlackRock Frontiers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SMA Solar position performs unexpectedly, BlackRock Frontiers 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 BlackRock Frontiers will offset losses from the drop in BlackRock Frontiers' long position.| SMA Solar vs. Fulcrum Metals PLC | SMA Solar vs. Empire Metals Limited | SMA Solar vs. European Metals Holdings | SMA Solar vs. GreenX Metals |
| BlackRock Frontiers vs. Livermore Investments Group | BlackRock Frontiers vs. Coeur Mining | BlackRock Frontiers vs. Smithson Investment Trust | BlackRock Frontiers vs. Ecclesiastical Insurance Office |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Complementary Tools
| Stocks Directory Find actively traded stocks across global markets | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments |