Correlation Between NYSE Composite and Solarmax Technology
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Solarmax Technology 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 NYSE Composite and Solarmax Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Solarmax Technology Common, you can compare the effects of market volatilities on NYSE Composite and Solarmax Technology 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 NYSE Composite with a short position of Solarmax Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Solarmax Technology.
Diversification Opportunities for NYSE Composite and Solarmax Technology
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between NYSE and Solarmax is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Solarmax Technology Common in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solarmax Technology and NYSE Composite 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 NYSE Composite are associated (or correlated) with Solarmax Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solarmax Technology has no effect on the direction of NYSE Composite i.e., NYSE Composite and Solarmax Technology go up and down completely randomly.
Pair Corralation between NYSE Composite and Solarmax Technology
Assuming the 90 days trading horizon NYSE Composite is expected to generate 11.8 times less return on investment than Solarmax Technology. But when comparing it to its historical volatility, NYSE Composite is 10.07 times less risky than Solarmax Technology. It trades about 0.29 of its potential returns per unit of risk. Solarmax Technology Common is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest 96.00 in Solarmax Technology Common on August 31, 2024 and sell it today you would earn a total of 52.00 from holding Solarmax Technology Common or generate 54.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Solarmax Technology Common
Performance |
| Timeline |
NYSE Composite and Solarmax Technology Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Solarmax Technology Common
Pair trading matchups for Solarmax Technology
Pair Trading with NYSE Composite and Solarmax Technology
The main advantage of trading using opposite NYSE Composite and Solarmax Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Solarmax Technology 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 Solarmax Technology will offset losses from the drop in Solarmax Technology's long position.| NYSE Composite vs. Nextplat Corp | NYSE Composite vs. Qualys Inc | NYSE Composite vs. Cadence Design Systems | NYSE Composite vs. Asure Software |
| Solarmax Technology vs. Cementos Pacasmayo SAA | Solarmax Technology vs. Minerals Technologies | Solarmax Technology vs. Highway Holdings Limited | Solarmax Technology vs. Summit Materials |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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