Correlation Between American Virtual and Soluna Holdings
Can any of the company-specific risk be diversified away by investing in both American Virtual and Soluna Holdings 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 American Virtual and Soluna Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Virtual Cloud and Soluna Holdings Preferred, you can compare the effects of market volatilities on American Virtual and Soluna Holdings 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 American Virtual with a short position of Soluna Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Virtual and Soluna Holdings.
Diversification Opportunities for American Virtual and Soluna Holdings
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between American and Soluna is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding American Virtual Cloud and Soluna Holdings Preferred in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Soluna Holdings Preferred and American Virtual 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 American Virtual Cloud are associated (or correlated) with Soluna Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Soluna Holdings Preferred has no effect on the direction of American Virtual i.e., American Virtual and Soluna Holdings go up and down completely randomly.
Pair Corralation between American Virtual and Soluna Holdings
Assuming the 90 days horizon American Virtual Cloud is expected to generate 13.37 times more return on investment than Soluna Holdings. However, American Virtual is 13.37 times more volatile than Soluna Holdings Preferred. It trades about 0.2 of its potential returns per unit of risk. Soluna Holdings Preferred is currently generating about 0.06 per unit of risk. If you would invest 1.42 in American Virtual Cloud on November 1, 2024 and sell it today you would lose (0.82) from holding American Virtual Cloud or give up 57.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 11.39% |
| Values | Daily Returns |
American Virtual Cloud vs. Soluna Holdings Preferred
Performance |
| Timeline |
| American Virtual Cloud |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Soluna Holdings Preferred |
American Virtual and Soluna Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Virtual and Soluna Holdings
The main advantage of trading using opposite American Virtual and Soluna Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Virtual position performs unexpectedly, Soluna Holdings 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 Soluna Holdings will offset losses from the drop in Soluna Holdings' long position.| American Virtual vs. Elmos Semiconductor SE | American Virtual vs. MagnaChip Semiconductor | American Virtual vs. Nordic Semiconductor ASA | American Virtual vs. Genfit |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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