Correlation Between SMA Solar and Impinj
Can any of the company-specific risk be diversified away by investing in both SMA Solar and Impinj 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 Impinj 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 Impinj Inc, you can compare the effects of market volatilities on SMA Solar and Impinj 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 Impinj. Check out your portfolio center. Please also check ongoing floating volatility patterns of SMA Solar and Impinj.
Diversification Opportunities for SMA Solar and Impinj
Very good diversification
The 3 months correlation between SMA and Impinj is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding SMA Solar Technology and Impinj Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Impinj 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 Impinj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Impinj Inc has no effect on the direction of SMA Solar i.e., SMA Solar and Impinj go up and down completely randomly.
Pair Corralation between SMA Solar and Impinj
Assuming the 90 days horizon SMA Solar Technology is expected to under-perform the Impinj. In addition to that, SMA Solar is 1.28 times more volatile than Impinj Inc. It trades about -0.15 of its total potential returns per unit of risk. Impinj Inc is currently generating about 0.1 per unit of volatility. If you would invest 14,950 in Impinj Inc on August 31, 2024 and sell it today you would earn a total of 2,790 from holding Impinj Inc or generate 18.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SMA Solar Technology vs. Impinj Inc
Performance |
| Timeline |
| SMA Solar Technology |
| Impinj Inc |
SMA Solar and Impinj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SMA Solar and Impinj
The main advantage of trading using opposite SMA Solar and Impinj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SMA Solar position performs unexpectedly, Impinj 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 Impinj will offset losses from the drop in Impinj's long position.| SMA Solar vs. Xinyi Solar Holdings | SMA Solar vs. JinkoSolar Holding Co | SMA Solar vs. Superior Plus Corp | SMA Solar vs. NMI Holdings |
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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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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