Correlation Between Palomar Holdings and Ascent Solar
Can any of the company-specific risk be diversified away by investing in both Palomar Holdings and Ascent 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 Palomar Holdings and Ascent Solar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Palomar Holdings and Ascent Solar Technologies,, you can compare the effects of market volatilities on Palomar Holdings and Ascent 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 Palomar Holdings with a short position of Ascent Solar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Palomar Holdings and Ascent Solar.
Diversification Opportunities for Palomar Holdings and Ascent Solar
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Palomar and Ascent is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Palomar Holdings and Ascent Solar Technologies, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ascent Solar Technol and Palomar Holdings 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 Palomar Holdings are associated (or correlated) with Ascent Solar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ascent Solar Technol has no effect on the direction of Palomar Holdings i.e., Palomar Holdings and Ascent Solar go up and down completely randomly.
Pair Corralation between Palomar Holdings and Ascent Solar
Given the investment horizon of 90 days Palomar Holdings is expected to generate 0.38 times more return on investment than Ascent Solar. However, Palomar Holdings is 2.64 times less risky than Ascent Solar. It trades about 0.04 of its potential returns per unit of risk. Ascent Solar Technologies, is currently generating about -0.31 per unit of risk. If you would invest 10,649 in Palomar Holdings on November 5, 2024 and sell it today you would earn a total of 138.00 from holding Palomar Holdings or generate 1.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Palomar Holdings vs. Ascent Solar Technologies,
Performance |
| Timeline |
| Palomar Holdings |
| Ascent Solar Technol |
Palomar Holdings and Ascent Solar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Palomar Holdings and Ascent Solar
The main advantage of trading using opposite Palomar Holdings and Ascent Solar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Palomar Holdings position performs unexpectedly, Ascent 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 Ascent Solar will offset losses from the drop in Ascent Solar's long position.| Palomar Holdings vs. Horace Mann Educators | Palomar Holdings vs. Kemper | Palomar Holdings vs. RLI Corp | Palomar Holdings vs. Global Indemnity PLC |
| Ascent Solar vs. Grupo Simec SAB | Ascent Solar vs. Tianjin Capital Environmental | Ascent Solar vs. Starwin Media Holdings | Ascent Solar vs. United States Steel |
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 Correlations module to find global opportunities by holding instruments from different markets.
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