Correlation Between SMA Solar and EIDESVIK OFFSHORE
Can any of the company-specific risk be diversified away by investing in both SMA Solar and EIDESVIK OFFSHORE 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 EIDESVIK OFFSHORE 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 EIDESVIK OFFSHORE NK, you can compare the effects of market volatilities on SMA Solar and EIDESVIK OFFSHORE 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 EIDESVIK OFFSHORE. Check out your portfolio center. Please also check ongoing floating volatility patterns of SMA Solar and EIDESVIK OFFSHORE.
Diversification Opportunities for SMA Solar and EIDESVIK OFFSHORE
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between SMA and EIDESVIK is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding SMA Solar Technology and EIDESVIK OFFSHORE NK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EIDESVIK OFFSHORE 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 EIDESVIK OFFSHORE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EIDESVIK OFFSHORE has no effect on the direction of SMA Solar i.e., SMA Solar and EIDESVIK OFFSHORE go up and down completely randomly.
Pair Corralation between SMA Solar and EIDESVIK OFFSHORE
Assuming the 90 days horizon SMA Solar Technology is expected to generate 2.5 times more return on investment than EIDESVIK OFFSHORE. However, SMA Solar is 2.5 times more volatile than EIDESVIK OFFSHORE NK. It trades about 0.04 of its potential returns per unit of risk. EIDESVIK OFFSHORE NK is currently generating about 0.06 per unit of risk. If you would invest 1,345 in SMA Solar Technology on October 30, 2024 and sell it today you would earn a total of 19.00 from holding SMA Solar Technology or generate 1.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SMA Solar Technology vs. EIDESVIK OFFSHORE NK
Performance |
| Timeline |
| SMA Solar Technology |
| EIDESVIK OFFSHORE |
SMA Solar and EIDESVIK OFFSHORE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SMA Solar and EIDESVIK OFFSHORE
The main advantage of trading using opposite SMA Solar and EIDESVIK OFFSHORE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SMA Solar position performs unexpectedly, EIDESVIK OFFSHORE 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 EIDESVIK OFFSHORE will offset losses from the drop in EIDESVIK OFFSHORE's long position.| SMA Solar vs. Alaska Air Group | SMA Solar vs. Pentair plc | SMA Solar vs. CITY OFFICE REIT | SMA Solar vs. CHINA SOUTHN AIR H |
| EIDESVIK OFFSHORE vs. FIREWEED METALS P | EIDESVIK OFFSHORE vs. STMICROELECTRONICS | EIDESVIK OFFSHORE vs. Transport International Holdings | EIDESVIK OFFSHORE vs. Fortescue Metals Group |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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