Correlation Between SMA Solar and PT United
Can any of the company-specific risk be diversified away by investing in both SMA Solar and PT United 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 PT United 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 PT United Tractors, you can compare the effects of market volatilities on SMA Solar and PT United 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 PT United. Check out your portfolio center. Please also check ongoing floating volatility patterns of SMA Solar and PT United.
Diversification Opportunities for SMA Solar and PT United
Very good diversification
The 3 months correlation between SMA and UTY is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding SMA Solar Technology and PT United Tractors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT United Tractors 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 PT United. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT United Tractors has no effect on the direction of SMA Solar i.e., SMA Solar and PT United go up and down completely randomly.
Pair Corralation between SMA Solar and PT United
Assuming the 90 days horizon SMA Solar Technology is expected to under-perform the PT United. In addition to that, SMA Solar is 1.11 times more volatile than PT United Tractors. It trades about -0.06 of its total potential returns per unit of risk. PT United Tractors is currently generating about 0.02 per unit of volatility. If you would invest 159.00 in PT United Tractors on September 12, 2024 and sell it today you would earn a total of 1.00 from holding PT United Tractors or generate 0.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SMA Solar Technology vs. PT United Tractors
Performance |
| Timeline |
| SMA Solar Technology |
| PT United Tractors |
SMA Solar and PT United Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SMA Solar and PT United
The main advantage of trading using opposite SMA Solar and PT United positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SMA Solar position performs unexpectedly, PT United 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 PT United will offset losses from the drop in PT United'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 |
| PT United vs. MACOM Technology Solutions | PT United vs. Computer And Technologies | PT United vs. SMA Solar Technology | PT United vs. DXC Technology Co |
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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