Correlation Between SMA Solar and NEXA RESOURCES
Can any of the company-specific risk be diversified away by investing in both SMA Solar and NEXA RESOURCES 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 NEXA RESOURCES 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 NEXA RESOURCES SA, you can compare the effects of market volatilities on SMA Solar and NEXA RESOURCES 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 NEXA RESOURCES. Check out your portfolio center. Please also check ongoing floating volatility patterns of SMA Solar and NEXA RESOURCES.
Diversification Opportunities for SMA Solar and NEXA RESOURCES
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between SMA and NEXA is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding SMA Solar Technology and NEXA RESOURCES SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEXA RESOURCES SA 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 NEXA RESOURCES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEXA RESOURCES SA has no effect on the direction of SMA Solar i.e., SMA Solar and NEXA RESOURCES go up and down completely randomly.
Pair Corralation between SMA Solar and NEXA RESOURCES
Assuming the 90 days horizon SMA Solar Technology is expected to under-perform the NEXA RESOURCES. In addition to that, SMA Solar is 1.48 times more volatile than NEXA RESOURCES SA. It trades about -0.06 of its total potential returns per unit of risk. NEXA RESOURCES SA is currently generating about 0.04 per unit of volatility. If you would invest 489.00 in NEXA RESOURCES SA on September 12, 2024 and sell it today you would earn a total of 231.00 from holding NEXA RESOURCES SA or generate 47.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SMA Solar Technology vs. NEXA RESOURCES SA
Performance |
| Timeline |
| SMA Solar Technology |
| NEXA RESOURCES SA |
SMA Solar and NEXA RESOURCES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SMA Solar and NEXA RESOURCES
The main advantage of trading using opposite SMA Solar and NEXA RESOURCES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SMA Solar position performs unexpectedly, NEXA RESOURCES 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 NEXA RESOURCES will offset losses from the drop in NEXA RESOURCES'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 |
| NEXA RESOURCES vs. DXC Technology Co | NEXA RESOURCES vs. SMA Solar Technology | NEXA RESOURCES vs. EAST SIDE GAMES | NEXA RESOURCES vs. MACOM Technology Solutions |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |