Correlation Between SMA Solar and AMAG AUSTRIA
Can any of the company-specific risk be diversified away by investing in both SMA Solar and AMAG AUSTRIA 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 AMAG AUSTRIA 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 AMAG AUSTRIA M, you can compare the effects of market volatilities on SMA Solar and AMAG AUSTRIA 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 AMAG AUSTRIA. Check out your portfolio center. Please also check ongoing floating volatility patterns of SMA Solar and AMAG AUSTRIA.
Diversification Opportunities for SMA Solar and AMAG AUSTRIA
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between SMA and AMAG is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding SMA Solar Technology and AMAG AUSTRIA M in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMAG AUSTRIA M 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 AMAG AUSTRIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMAG AUSTRIA M has no effect on the direction of SMA Solar i.e., SMA Solar and AMAG AUSTRIA go up and down completely randomly.
Pair Corralation between SMA Solar and AMAG AUSTRIA
Assuming the 90 days horizon SMA Solar Technology is expected to under-perform the AMAG AUSTRIA. In addition to that, SMA Solar is 4.56 times more volatile than AMAG AUSTRIA M. It trades about -0.06 of its total potential returns per unit of risk. AMAG AUSTRIA M is currently generating about -0.05 per unit of volatility. If you would invest 3,170 in AMAG AUSTRIA M on September 14, 2024 and sell it today you would lose (690.00) from holding AMAG AUSTRIA M or give up 21.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
SMA Solar Technology vs. AMAG AUSTRIA M
Performance |
| Timeline |
| SMA Solar Technology |
| AMAG AUSTRIA M |
SMA Solar and AMAG AUSTRIA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SMA Solar and AMAG AUSTRIA
The main advantage of trading using opposite SMA Solar and AMAG AUSTRIA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SMA Solar position performs unexpectedly, AMAG AUSTRIA 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 AMAG AUSTRIA will offset losses from the drop in AMAG AUSTRIA's long position.| SMA Solar vs. Sunrun Inc | SMA Solar vs. Superior Plus Corp | SMA Solar vs. SIVERS SEMICONDUCTORS AB | SMA Solar vs. Norsk Hydro ASA |
| AMAG AUSTRIA vs. UNIVERSAL MUSIC GROUP | AMAG AUSTRIA vs. Siamgas And Petrochemicals | AMAG AUSTRIA vs. Zoom Video Communications | AMAG AUSTRIA vs. INDO RAMA SYNTHETIC |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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