Correlation Between Neinor Homes and SMA Solar
Can any of the company-specific risk be diversified away by investing in both Neinor Homes and SMA Solar 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 Neinor Homes and SMA Solar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Neinor Homes SA and SMA Solar Technology, you can compare the effects of market volatilities on Neinor Homes and SMA Solar 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 Neinor Homes with a short position of SMA Solar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Neinor Homes and SMA Solar.
Diversification Opportunities for Neinor Homes and SMA Solar
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Neinor and SMA is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Neinor Homes SA and SMA Solar Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SMA Solar Technology and Neinor Homes 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 Neinor Homes SA are associated (or correlated) with SMA Solar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SMA Solar Technology has no effect on the direction of Neinor Homes i.e., Neinor Homes and SMA Solar go up and down completely randomly.
Pair Corralation between Neinor Homes and SMA Solar
Assuming the 90 days trading horizon Neinor Homes SA is expected to generate 0.24 times more return on investment than SMA Solar. However, Neinor Homes SA is 4.12 times less risky than SMA Solar. It trades about 0.0 of its potential returns per unit of risk. SMA Solar Technology is currently generating about -0.12 per unit of risk. If you would invest 1,500 in Neinor Homes SA on September 4, 2024 and sell it today you would lose (2.00) from holding Neinor Homes SA or give up 0.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Neinor Homes SA vs. SMA Solar Technology
Performance |
| Timeline |
| Neinor Homes SA |
| SMA Solar Technology |
Neinor Homes and SMA Solar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Neinor Homes and SMA Solar
The main advantage of trading using opposite Neinor Homes and SMA Solar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Neinor Homes position performs unexpectedly, SMA Solar 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 SMA Solar will offset losses from the drop in SMA Solar's long position.| Neinor Homes vs. Apple Inc | Neinor Homes vs. Apple Inc | Neinor Homes vs. Apple Inc | Neinor Homes vs. Apple Inc |
| SMA Solar vs. Hyatt Hotels | SMA Solar vs. Meli Hotels International | SMA Solar vs. Xenia Hotels Resorts | SMA Solar vs. ANTA SPORTS PRODUCT |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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