Correlation Between SMA Solar and NURAN WIRELESS
Can any of the company-specific risk be diversified away by investing in both SMA Solar and NURAN WIRELESS 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 NURAN WIRELESS 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 NURAN WIRELESS INC, you can compare the effects of market volatilities on SMA Solar and NURAN WIRELESS 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 NURAN WIRELESS. Check out your portfolio center. Please also check ongoing floating volatility patterns of SMA Solar and NURAN WIRELESS.
Diversification Opportunities for SMA Solar and NURAN WIRELESS
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SMA and NURAN is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding SMA Solar Technology and NURAN WIRELESS INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NURAN WIRELESS INC 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 NURAN WIRELESS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NURAN WIRELESS INC has no effect on the direction of SMA Solar i.e., SMA Solar and NURAN WIRELESS go up and down completely randomly.
Pair Corralation between SMA Solar and NURAN WIRELESS
Assuming the 90 days horizon SMA Solar Technology is expected to generate 1.29 times more return on investment than NURAN WIRELESS. However, SMA Solar is 1.29 times more volatile than NURAN WIRELESS INC. It trades about -0.12 of its potential returns per unit of risk. NURAN WIRELESS INC is currently generating about -0.16 per unit of risk. If you would invest 1,575 in SMA Solar Technology on September 4, 2024 and sell it today you would lose (239.00) from holding SMA Solar Technology or give up 15.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
SMA Solar Technology vs. NURAN WIRELESS INC
Performance |
| Timeline |
| SMA Solar Technology |
| NURAN WIRELESS INC |
SMA Solar and NURAN WIRELESS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SMA Solar and NURAN WIRELESS
The main advantage of trading using opposite SMA Solar and NURAN WIRELESS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SMA Solar position performs unexpectedly, NURAN WIRELESS 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 NURAN WIRELESS will offset losses from the drop in NURAN WIRELESS's 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 |
| NURAN WIRELESS vs. INTERCONT HOTELS | NURAN WIRELESS vs. Meli Hotels International | NURAN WIRELESS vs. Pebblebrook Hotel Trust | NURAN WIRELESS vs. Playa Hotels Resorts |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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