Correlation Between SMA Solar and MTI Wireless
Can any of the company-specific risk be diversified away by investing in both SMA Solar and MTI Wireless 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 MTI Wireless 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 MTI Wireless Edge, you can compare the effects of market volatilities on SMA Solar and MTI Wireless 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 MTI Wireless. Check out your portfolio center. Please also check ongoing floating volatility patterns of SMA Solar and MTI Wireless.
Diversification Opportunities for SMA Solar and MTI Wireless
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SMA and MTI is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding SMA Solar Technology and MTI Wireless Edge in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MTI Wireless Edge 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 MTI Wireless. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MTI Wireless Edge has no effect on the direction of SMA Solar i.e., SMA Solar and MTI Wireless go up and down completely randomly.
Pair Corralation between SMA Solar and MTI Wireless
Assuming the 90 days trading horizon SMA Solar Technology is expected to under-perform the MTI Wireless. In addition to that, SMA Solar is 1.67 times more volatile than MTI Wireless Edge. It trades about -0.07 of its total potential returns per unit of risk. MTI Wireless Edge is currently generating about 0.03 per unit of volatility. If you would invest 4,423 in MTI Wireless Edge on October 28, 2024 and sell it today you would earn a total of 777.00 from holding MTI Wireless Edge or generate 17.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SMA Solar Technology vs. MTI Wireless Edge
Performance |
| Timeline |
| SMA Solar Technology |
| MTI Wireless Edge |
SMA Solar and MTI Wireless Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SMA Solar and MTI Wireless
The main advantage of trading using opposite SMA Solar and MTI Wireless positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SMA Solar position performs unexpectedly, MTI Wireless 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 MTI Wireless will offset losses from the drop in MTI Wireless' long position.| SMA Solar vs. Roadside Real Estate | SMA Solar vs. Wyndham Hotels Resorts | SMA Solar vs. Gaztransport et Technigaz | SMA Solar vs. Take Two Interactive Software |
| MTI Wireless vs. Toyota Motor Corp | MTI Wireless vs. SoftBank Group Corp | MTI Wireless vs. Halyk Bank of | MTI Wireless vs. Samsung Electronics Co |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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