Correlation Between Bloomsbury Publishing and SMA Solar
Can any of the company-specific risk be diversified away by investing in both Bloomsbury Publishing 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 Bloomsbury Publishing and SMA Solar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bloomsbury Publishing Plc and SMA Solar Technology, you can compare the effects of market volatilities on Bloomsbury Publishing 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 Bloomsbury Publishing with a short position of SMA Solar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bloomsbury Publishing and SMA Solar.
Diversification Opportunities for Bloomsbury Publishing and SMA Solar
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Bloomsbury and SMA is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Bloomsbury Publishing Plc 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 Bloomsbury Publishing 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 Bloomsbury Publishing Plc 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 Bloomsbury Publishing i.e., Bloomsbury Publishing and SMA Solar go up and down completely randomly.
Pair Corralation between Bloomsbury Publishing and SMA Solar
Assuming the 90 days trading horizon Bloomsbury Publishing Plc is expected to generate 0.53 times more return on investment than SMA Solar. However, Bloomsbury Publishing Plc is 1.89 times less risky than SMA Solar. It trades about 0.05 of its potential returns per unit of risk. SMA Solar Technology is currently generating about -0.07 per unit of risk. If you would invest 42,813 in Bloomsbury Publishing Plc on October 11, 2024 and sell it today you would earn a total of 20,387 from holding Bloomsbury Publishing Plc or generate 47.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bloomsbury Publishing Plc vs. SMA Solar Technology
Performance |
| Timeline |
| Bloomsbury Publishing Plc |
| SMA Solar Technology |
Bloomsbury Publishing and SMA Solar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bloomsbury Publishing and SMA Solar
The main advantage of trading using opposite Bloomsbury Publishing and SMA Solar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bloomsbury Publishing 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.| Bloomsbury Publishing vs. Indutrade AB | Bloomsbury Publishing vs. BE Semiconductor Industries | Bloomsbury Publishing vs. Nordic Semiconductor ASA | Bloomsbury Publishing vs. Baker Steel Resources |
| SMA Solar vs. Cizzle Biotechnology Holdings | SMA Solar vs. Wyndham Hotels Resorts | SMA Solar vs. Bloomsbury Publishing Plc | SMA Solar vs. Cellnex Telecom SA |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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