Correlation Between SMA Solar and SKYWORKS SOLUTIONS
Can any of the company-specific risk be diversified away by investing in both SMA Solar and SKYWORKS SOLUTIONS 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 SKYWORKS SOLUTIONS 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 SKYWORKS SOLUTIONS , you can compare the effects of market volatilities on SMA Solar and SKYWORKS SOLUTIONS 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 SKYWORKS SOLUTIONS. Check out your portfolio center. Please also check ongoing floating volatility patterns of SMA Solar and SKYWORKS SOLUTIONS.
Diversification Opportunities for SMA Solar and SKYWORKS SOLUTIONS
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SMA and SKYWORKS is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding SMA Solar Technology and SKYWORKS SOLUTIONS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SKYWORKS SOLUTIONS 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 SKYWORKS SOLUTIONS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SKYWORKS SOLUTIONS has no effect on the direction of SMA Solar i.e., SMA Solar and SKYWORKS SOLUTIONS go up and down completely randomly.
Pair Corralation between SMA Solar and SKYWORKS SOLUTIONS
Assuming the 90 days horizon SMA Solar is expected to generate 1.66 times less return on investment than SKYWORKS SOLUTIONS. In addition to that, SMA Solar is 3.08 times more volatile than SKYWORKS SOLUTIONS . It trades about 0.03 of its total potential returns per unit of risk. SKYWORKS SOLUTIONS is currently generating about 0.13 per unit of volatility. If you would invest 8,097 in SKYWORKS SOLUTIONS on September 12, 2024 and sell it today you would earn a total of 390.00 from holding SKYWORKS SOLUTIONS or generate 4.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
SMA Solar Technology vs. SKYWORKS SOLUTIONS
Performance |
| Timeline |
| SMA Solar Technology |
| SKYWORKS SOLUTIONS |
SMA Solar and SKYWORKS SOLUTIONS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SMA Solar and SKYWORKS SOLUTIONS
The main advantage of trading using opposite SMA Solar and SKYWORKS SOLUTIONS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SMA Solar position performs unexpectedly, SKYWORKS SOLUTIONS 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 SKYWORKS SOLUTIONS will offset losses from the drop in SKYWORKS SOLUTIONS'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 |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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