Correlation Between SMA Solar and FRACTAL GAMING
Can any of the company-specific risk be diversified away by investing in both SMA Solar and FRACTAL GAMING 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 FRACTAL GAMING 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 FRACTAL GAMING GROUP, you can compare the effects of market volatilities on SMA Solar and FRACTAL GAMING 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 FRACTAL GAMING. Check out your portfolio center. Please also check ongoing floating volatility patterns of SMA Solar and FRACTAL GAMING.
Diversification Opportunities for SMA Solar and FRACTAL GAMING
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SMA and FRACTAL is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding SMA Solar Technology and FRACTAL GAMING GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FRACTAL GAMING GROUP 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 FRACTAL GAMING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FRACTAL GAMING GROUP has no effect on the direction of SMA Solar i.e., SMA Solar and FRACTAL GAMING go up and down completely randomly.
Pair Corralation between SMA Solar and FRACTAL GAMING
Assuming the 90 days horizon SMA Solar Technology is expected to under-perform the FRACTAL GAMING. In addition to that, SMA Solar is 3.03 times more volatile than FRACTAL GAMING GROUP. It trades about -0.42 of its total potential returns per unit of risk. FRACTAL GAMING GROUP is currently generating about -0.24 per unit of volatility. If you would invest 292.00 in FRACTAL GAMING GROUP on August 27, 2024 and sell it today you would lose (19.00) from holding FRACTAL GAMING GROUP or give up 6.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SMA Solar Technology vs. FRACTAL GAMING GROUP
Performance |
| Timeline |
| SMA Solar Technology |
| FRACTAL GAMING GROUP |
SMA Solar and FRACTAL GAMING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SMA Solar and FRACTAL GAMING
The main advantage of trading using opposite SMA Solar and FRACTAL GAMING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SMA Solar position performs unexpectedly, FRACTAL GAMING 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 FRACTAL GAMING will offset losses from the drop in FRACTAL GAMING's long position.| SMA Solar vs. Superior Plus Corp | SMA Solar vs. Origin Agritech | SMA Solar vs. Identiv | SMA Solar vs. INTUITIVE SURGICAL |
| FRACTAL GAMING vs. Sunny Optical Technology | FRACTAL GAMING vs. Align Technology | FRACTAL GAMING vs. SMA Solar Technology | FRACTAL GAMING vs. MINCO SILVER |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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