Correlation Between SMA Solar and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both SMA Solar and Goldman Sachs 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 Goldman Sachs 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 The Goldman Sachs, you can compare the effects of market volatilities on SMA Solar and Goldman Sachs 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 Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of SMA Solar and Goldman Sachs.
Diversification Opportunities for SMA Solar and Goldman Sachs
-0.92 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between SMA and Goldman is -0.92. Overlapping area represents the amount of risk that can be diversified away by holding SMA Solar Technology and The Goldman Sachs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs 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 Goldman Sachs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goldman Sachs has no effect on the direction of SMA Solar i.e., SMA Solar and Goldman Sachs go up and down completely randomly.
Pair Corralation between SMA Solar and Goldman Sachs
Assuming the 90 days horizon SMA Solar Technology is expected to generate 5.37 times more return on investment than Goldman Sachs. However, SMA Solar is 5.37 times more volatile than The Goldman Sachs. It trades about 0.03 of its potential returns per unit of risk. The Goldman Sachs is currently generating about 0.03 per unit of risk. If you would invest 1,442 in SMA Solar Technology on September 12, 2024 and sell it today you would earn a total of 0.00 from holding SMA Solar Technology or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SMA Solar Technology vs. The Goldman Sachs
Performance |
| Timeline |
| SMA Solar Technology |
| Goldman Sachs |
SMA Solar and Goldman Sachs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SMA Solar and Goldman Sachs
The main advantage of trading using opposite SMA Solar and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SMA Solar position performs unexpectedly, Goldman Sachs 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 Goldman Sachs will offset losses from the drop in Goldman Sachs' 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 |
| Goldman Sachs vs. SMA Solar Technology | Goldman Sachs vs. Axcelis Technologies | Goldman Sachs vs. GLG LIFE TECH | Goldman Sachs vs. NetSol Technologies |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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