Correlation Between SMA Solar and Lendinvest PLC
Can any of the company-specific risk be diversified away by investing in both SMA Solar and Lendinvest PLC 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 Lendinvest PLC 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 Lendinvest PLC, you can compare the effects of market volatilities on SMA Solar and Lendinvest PLC 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 Lendinvest PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of SMA Solar and Lendinvest PLC.
Diversification Opportunities for SMA Solar and Lendinvest PLC
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SMA and Lendinvest is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding SMA Solar Technology and Lendinvest PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lendinvest PLC 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 Lendinvest PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lendinvest PLC has no effect on the direction of SMA Solar i.e., SMA Solar and Lendinvest PLC go up and down completely randomly.
Pair Corralation between SMA Solar and Lendinvest PLC
Assuming the 90 days trading horizon SMA Solar Technology is expected to under-perform the Lendinvest PLC. In addition to that, SMA Solar is 2.37 times more volatile than Lendinvest PLC. It trades about -0.11 of its total potential returns per unit of risk. Lendinvest PLC is currently generating about -0.03 per unit of volatility. If you would invest 3,000 in Lendinvest PLC on September 14, 2024 and sell it today you would lose (450.00) from holding Lendinvest PLC or give up 15.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SMA Solar Technology vs. Lendinvest PLC
Performance |
| Timeline |
| SMA Solar Technology |
| Lendinvest PLC |
SMA Solar and Lendinvest PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SMA Solar and Lendinvest PLC
The main advantage of trading using opposite SMA Solar and Lendinvest PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SMA Solar position performs unexpectedly, Lendinvest PLC 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 Lendinvest PLC will offset losses from the drop in Lendinvest PLC's long position.| SMA Solar vs. Europa Metals | SMA Solar vs. Gaming Realms plc | SMA Solar vs. Games Workshop Group | SMA Solar vs. Central Asia Metals |
| Lendinvest PLC vs. Check Point Software | Lendinvest PLC vs. Creo Medical Group | Lendinvest PLC vs. Polar Capital Technology | Lendinvest PLC 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |