Correlation Between SMA Solar and KEBNI AB
Can any of the company-specific risk be diversified away by investing in both SMA Solar and KEBNI AB 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 KEBNI AB 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 KEBNI AB SERB, you can compare the effects of market volatilities on SMA Solar and KEBNI AB 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 KEBNI AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of SMA Solar and KEBNI AB.
Diversification Opportunities for SMA Solar and KEBNI AB
Almost no diversification
The 3 months correlation between SMA and KEBNI is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding SMA Solar Technology and KEBNI AB SERB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KEBNI AB SERB 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 KEBNI AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KEBNI AB SERB has no effect on the direction of SMA Solar i.e., SMA Solar and KEBNI AB go up and down completely randomly.
Pair Corralation between SMA Solar and KEBNI AB
Assuming the 90 days horizon SMA Solar Technology is expected to under-perform the KEBNI AB. In addition to that, SMA Solar is 1.36 times more volatile than KEBNI AB SERB. It trades about -0.19 of its total potential returns per unit of risk. KEBNI AB SERB is currently generating about -0.13 per unit of volatility. If you would invest 8.72 in KEBNI AB SERB on August 31, 2024 and sell it today you would lose (1.04) from holding KEBNI AB SERB or give up 11.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
SMA Solar Technology vs. KEBNI AB SERB
Performance |
| Timeline |
| SMA Solar Technology |
| KEBNI AB SERB |
SMA Solar and KEBNI AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SMA Solar and KEBNI AB
The main advantage of trading using opposite SMA Solar and KEBNI AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SMA Solar position performs unexpectedly, KEBNI AB 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 KEBNI AB will offset losses from the drop in KEBNI AB's long position.| SMA Solar vs. Xinyi Solar Holdings | SMA Solar vs. JinkoSolar Holding Co | SMA Solar vs. Superior Plus Corp | SMA Solar vs. NMI Holdings |
| KEBNI AB vs. SMA Solar Technology | KEBNI AB vs. X Fab Silicon | KEBNI AB vs. Chesapeake Utilities | KEBNI AB vs. Hyster Yale Materials Handling |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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