Correlation Between Collins Foods and SolarEdge Technologies
Can any of the company-specific risk be diversified away by investing in both Collins Foods and SolarEdge Technologies 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 Collins Foods and SolarEdge Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Collins Foods Limited and SolarEdge Technologies, you can compare the effects of market volatilities on Collins Foods and SolarEdge Technologies 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 Collins Foods with a short position of SolarEdge Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Collins Foods and SolarEdge Technologies.
Diversification Opportunities for Collins Foods and SolarEdge Technologies
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Collins and SolarEdge is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Collins Foods Limited and SolarEdge Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SolarEdge Technologies and Collins Foods 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 Collins Foods Limited are associated (or correlated) with SolarEdge Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SolarEdge Technologies has no effect on the direction of Collins Foods i.e., Collins Foods and SolarEdge Technologies go up and down completely randomly.
Pair Corralation between Collins Foods and SolarEdge Technologies
Assuming the 90 days horizon Collins Foods Limited is expected to under-perform the SolarEdge Technologies. But the stock apears to be less risky and, when comparing its historical volatility, Collins Foods Limited is 6.02 times less risky than SolarEdge Technologies. The stock trades about -0.11 of its potential returns per unit of risk. The SolarEdge Technologies is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,300 in SolarEdge Technologies on October 20, 2024 and sell it today you would earn a total of 64.00 from holding SolarEdge Technologies or generate 4.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Collins Foods Limited vs. SolarEdge Technologies
Performance |
| Timeline |
| Collins Foods Limited |
| SolarEdge Technologies |
Collins Foods and SolarEdge Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Collins Foods and SolarEdge Technologies
The main advantage of trading using opposite Collins Foods and SolarEdge Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Collins Foods position performs unexpectedly, SolarEdge Technologies 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 SolarEdge Technologies will offset losses from the drop in SolarEdge Technologies' long position.| Collins Foods vs. Citic Telecom International | Collins Foods vs. Fuji Media Holdings | Collins Foods vs. GigaMedia | Collins Foods vs. INTERSHOP Communications Aktiengesellschaft |
| SolarEdge Technologies vs. First Solar | SolarEdge Technologies vs. Xinyi Solar Holdings | SolarEdge Technologies vs. Sunrun Inc | SolarEdge Technologies vs. JinkoSolar Holding 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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