Correlation Between SMA Solar and BANK OCHINA
Can any of the company-specific risk be diversified away by investing in both SMA Solar and BANK OCHINA 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 BANK OCHINA 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 BANK OCHINA H, you can compare the effects of market volatilities on SMA Solar and BANK OCHINA 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 BANK OCHINA. Check out your portfolio center. Please also check ongoing floating volatility patterns of SMA Solar and BANK OCHINA.
Diversification Opportunities for SMA Solar and BANK OCHINA
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SMA and BANK is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding SMA Solar Technology and BANK OCHINA H in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BANK OCHINA H 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 BANK OCHINA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BANK OCHINA H has no effect on the direction of SMA Solar i.e., SMA Solar and BANK OCHINA go up and down completely randomly.
Pair Corralation between SMA Solar and BANK OCHINA
Assuming the 90 days horizon SMA Solar Technology is expected to under-perform the BANK OCHINA. In addition to that, SMA Solar is 3.24 times more volatile than BANK OCHINA H. It trades about -0.16 of its total potential returns per unit of risk. BANK OCHINA H is currently generating about 0.01 per unit of volatility. If you would invest 1,070 in BANK OCHINA H on September 5, 2024 and sell it today you would earn a total of 0.00 from holding BANK OCHINA H or generate 0.0% 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. BANK OCHINA H
Performance |
| Timeline |
| SMA Solar Technology |
| BANK OCHINA H |
SMA Solar and BANK OCHINA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SMA Solar and BANK OCHINA
The main advantage of trading using opposite SMA Solar and BANK OCHINA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SMA Solar position performs unexpectedly, BANK OCHINA 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 BANK OCHINA will offset losses from the drop in BANK OCHINA's long position.| SMA Solar vs. Superior Plus Corp | SMA Solar vs. NMI Holdings | SMA Solar vs. Origin Agritech | SMA Solar vs. SIVERS SEMICONDUCTORS AB |
| BANK OCHINA vs. SMA Solar Technology | BANK OCHINA vs. DXC Technology Co | BANK OCHINA vs. Lifeway Foods | BANK OCHINA vs. Micron Technology |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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