Correlation Between SMA Solar and Calbee
Can any of the company-specific risk be diversified away by investing in both SMA Solar and Calbee 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 Calbee 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 Calbee Inc, you can compare the effects of market volatilities on SMA Solar and Calbee 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 Calbee. Check out your portfolio center. Please also check ongoing floating volatility patterns of SMA Solar and Calbee.
Diversification Opportunities for SMA Solar and Calbee
Average diversification
The 3 months correlation between SMA and Calbee is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding SMA Solar Technology and Calbee Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calbee 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 Calbee. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calbee Inc has no effect on the direction of SMA Solar i.e., SMA Solar and Calbee go up and down completely randomly.
Pair Corralation between SMA Solar and Calbee
Assuming the 90 days horizon SMA Solar Technology is expected to under-perform the Calbee. In addition to that, SMA Solar is 2.06 times more volatile than Calbee Inc. It trades about -0.09 of its total potential returns per unit of risk. Calbee Inc is currently generating about -0.16 per unit of volatility. If you would invest 1,910 in Calbee Inc on November 3, 2024 and sell it today you would lose (110.00) from holding Calbee Inc or give up 5.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SMA Solar Technology vs. Calbee Inc
Performance |
| Timeline |
| SMA Solar Technology |
| Calbee Inc |
SMA Solar and Calbee Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SMA Solar and Calbee
The main advantage of trading using opposite SMA Solar and Calbee positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SMA Solar position performs unexpectedly, Calbee 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 Calbee will offset losses from the drop in Calbee's long position.| SMA Solar vs. First Solar | SMA Solar vs. SolarEdge Technologies | SMA Solar vs. Xinyi Solar Holdings | SMA Solar vs. Sunrun 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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