Correlation Between SMA Solar and Primary Health
Can any of the company-specific risk be diversified away by investing in both SMA Solar and Primary Health 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 Primary Health 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 Primary Health Properties, you can compare the effects of market volatilities on SMA Solar and Primary Health 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 Primary Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of SMA Solar and Primary Health.
Diversification Opportunities for SMA Solar and Primary Health
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SMA and Primary is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding SMA Solar Technology and Primary Health Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Primary Health Properties 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 Primary Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Primary Health Properties has no effect on the direction of SMA Solar i.e., SMA Solar and Primary Health go up and down completely randomly.
Pair Corralation between SMA Solar and Primary Health
Assuming the 90 days trading horizon SMA Solar Technology is expected to under-perform the Primary Health. In addition to that, SMA Solar is 4.67 times more volatile than Primary Health Properties. It trades about -0.21 of its total potential returns per unit of risk. Primary Health Properties is currently generating about -0.12 per unit of volatility. If you would invest 9,675 in Primary Health Properties on August 29, 2024 and sell it today you would lose (260.00) from holding Primary Health Properties or give up 2.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SMA Solar Technology vs. Primary Health Properties
Performance |
| Timeline |
| SMA Solar Technology |
| Primary Health Properties |
SMA Solar and Primary Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SMA Solar and Primary Health
The main advantage of trading using opposite SMA Solar and Primary Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SMA Solar position performs unexpectedly, Primary Health 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 Primary Health will offset losses from the drop in Primary Health's long position.| SMA Solar vs. Samsung Electronics Co | SMA Solar vs. Samsung Electronics Co | SMA Solar vs. Hyundai Motor | SMA Solar vs. Toyota Motor Corp |
| Primary Health vs. Aeorema Communications Plc | Primary Health vs. Zegona Communications Plc | Primary Health vs. Universal Display Corp | Primary Health 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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals |