Correlation Between SMA Solar and Oxford Technology
Can any of the company-specific risk be diversified away by investing in both SMA Solar and Oxford Technology 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 Oxford Technology 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 Oxford Technology 2, you can compare the effects of market volatilities on SMA Solar and Oxford Technology 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 Oxford Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of SMA Solar and Oxford Technology.
Diversification Opportunities for SMA Solar and Oxford Technology
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between SMA and Oxford is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SMA Solar Technology and Oxford Technology 2 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oxford Technology 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 Oxford Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oxford Technology has no effect on the direction of SMA Solar i.e., SMA Solar and Oxford Technology go up and down completely randomly.
Pair Corralation between SMA Solar and Oxford Technology
Assuming the 90 days trading horizon SMA Solar Technology is expected to under-perform the Oxford Technology. In addition to that, SMA Solar is 1.82 times more volatile than Oxford Technology 2. It trades about -0.08 of its total potential returns per unit of risk. Oxford Technology 2 is currently generating about -0.12 per unit of volatility. If you would invest 2,650 in Oxford Technology 2 on October 30, 2024 and sell it today you would lose (1,950) from holding Oxford Technology 2 or give up 73.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SMA Solar Technology vs. Oxford Technology 2
Performance |
| Timeline |
| SMA Solar Technology |
| Oxford Technology |
SMA Solar and Oxford Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SMA Solar and Oxford Technology
The main advantage of trading using opposite SMA Solar and Oxford Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SMA Solar position performs unexpectedly, Oxford Technology 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 Oxford Technology will offset losses from the drop in Oxford Technology's long position.| SMA Solar vs. Wyndham Hotels Resorts | SMA Solar vs. Fevertree Drinks Plc | SMA Solar vs. Ondine Biomedical | SMA Solar vs. National Beverage Corp |
| Oxford Technology vs. Leroy Seafood Group | Oxford Technology vs. STMicroelectronics NV | Oxford Technology vs. Axfood AB | Oxford Technology vs. Molson Coors Beverage |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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