Correlation Between SMA Solar and Schroder Real
Can any of the company-specific risk be diversified away by investing in both SMA Solar and Schroder Real 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 Schroder Real 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 Schroder Real Estate, you can compare the effects of market volatilities on SMA Solar and Schroder Real 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 Schroder Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of SMA Solar and Schroder Real.
Diversification Opportunities for SMA Solar and Schroder Real
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between SMA and Schroder is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding SMA Solar Technology and Schroder Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schroder Real Estate 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 Schroder Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schroder Real Estate has no effect on the direction of SMA Solar i.e., SMA Solar and Schroder Real go up and down completely randomly.
Pair Corralation between SMA Solar and Schroder Real
Assuming the 90 days trading horizon SMA Solar Technology is expected to under-perform the Schroder Real. In addition to that, SMA Solar is 4.02 times more volatile than Schroder Real Estate. It trades about -0.14 of its total potential returns per unit of risk. Schroder Real Estate is currently generating about -0.03 per unit of volatility. If you would invest 5,040 in Schroder Real Estate on September 1, 2024 and sell it today you would lose (50.00) from holding Schroder Real Estate or give up 0.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
SMA Solar Technology vs. Schroder Real Estate
Performance |
| Timeline |
| SMA Solar Technology |
| Schroder Real Estate |
SMA Solar and Schroder Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SMA Solar and Schroder Real
The main advantage of trading using opposite SMA Solar and Schroder Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SMA Solar position performs unexpectedly, Schroder Real 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 Schroder Real will offset losses from the drop in Schroder Real's long position.| SMA Solar vs. Uniper SE | SMA Solar vs. Mulberry Group PLC | SMA Solar vs. London Security Plc | SMA Solar vs. Triad Group PLC |
| Schroder Real vs. Hammerson PLC | Schroder Real vs. Workspace Group PLC | Schroder Real vs. Supermarket Income REIT | Schroder Real vs. Diversified Energy |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |