Correlation Between SMA Solar and Neinor Homes
Can any of the company-specific risk be diversified away by investing in both SMA Solar and Neinor Homes 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 SMA Solar and Neinor Homes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SMA Solar Technology and Neinor Homes SA, you can compare the effects of market volatilities on SMA Solar and Neinor Homes 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 SMA Solar with a short position of Neinor Homes. Check out your portfolio center. Please also check ongoing floating volatility patterns of SMA Solar and Neinor Homes.
Diversification Opportunities for SMA Solar and Neinor Homes
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between SMA and Neinor is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding SMA Solar Technology and Neinor Homes SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neinor Homes SA and SMA Solar 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 SMA Solar Technology are associated (or correlated) with Neinor Homes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neinor Homes SA has no effect on the direction of SMA Solar i.e., SMA Solar and Neinor Homes go up and down completely randomly.
Pair Corralation between SMA Solar and Neinor Homes
Assuming the 90 days horizon SMA Solar Technology is expected to under-perform the Neinor Homes. In addition to that, SMA Solar is 4.12 times more volatile than Neinor Homes SA. It trades about -0.12 of its total potential returns per unit of risk. Neinor Homes SA is currently generating about 0.0 per unit of volatility. If you would invest 1,500 in Neinor Homes SA on September 4, 2024 and sell it today you would lose (2.00) from holding Neinor Homes SA or give up 0.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SMA Solar Technology vs. Neinor Homes SA
Performance |
| Timeline |
| SMA Solar Technology |
| Neinor Homes SA |
SMA Solar and Neinor Homes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SMA Solar and Neinor Homes
The main advantage of trading using opposite SMA Solar and Neinor Homes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SMA Solar position performs unexpectedly, Neinor Homes 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 Neinor Homes will offset losses from the drop in Neinor Homes' long position.| SMA Solar vs. Hyatt Hotels | SMA Solar vs. Meli Hotels International | SMA Solar vs. Xenia Hotels Resorts | SMA Solar vs. ANTA SPORTS PRODUCT |
| Neinor Homes vs. Apple Inc | Neinor Homes vs. Apple Inc | Neinor Homes vs. Apple Inc | Neinor Homes vs. Apple Inc |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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