Correlation Between SMA Solar and INPOST SA
Can any of the company-specific risk be diversified away by investing in both SMA Solar and INPOST SA 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 INPOST SA 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 INPOST SA EO, you can compare the effects of market volatilities on SMA Solar and INPOST SA 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 INPOST SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of SMA Solar and INPOST SA.
Diversification Opportunities for SMA Solar and INPOST SA
Modest diversification
The 3 months correlation between SMA and INPOST is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding SMA Solar Technology and INPOST SA EO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INPOST SA EO 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 INPOST SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INPOST SA EO has no effect on the direction of SMA Solar i.e., SMA Solar and INPOST SA go up and down completely randomly.
Pair Corralation between SMA Solar and INPOST SA
Assuming the 90 days horizon SMA Solar Technology is expected to generate 3.17 times more return on investment than INPOST SA. However, SMA Solar is 3.17 times more volatile than INPOST SA EO. It trades about 0.17 of its potential returns per unit of risk. INPOST SA EO is currently generating about 0.21 per unit of risk. If you would invest 1,266 in SMA Solar Technology on December 4, 2024 and sell it today you would earn a total of 173.00 from holding SMA Solar Technology or generate 13.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SMA Solar Technology vs. INPOST SA EO
Performance |
| Timeline |
| SMA Solar Technology |
| INPOST SA EO |
SMA Solar and INPOST SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SMA Solar and INPOST SA
The main advantage of trading using opposite SMA Solar and INPOST SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SMA Solar position performs unexpectedly, INPOST SA 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 INPOST SA will offset losses from the drop in INPOST SA's long position.| SMA Solar vs. Scottish Mortgage Investment | SMA Solar vs. QBE Insurance Group | SMA Solar vs. The Hanover Insurance | SMA Solar vs. ECHO INVESTMENT ZY |
| INPOST SA vs. United Airlines Holdings | INPOST SA vs. MEDICAL FACILITIES NEW | INPOST SA vs. Peijia Medical Limited | INPOST SA vs. Compugroup Medical SE |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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