Correlation Between SMA Solar and Superior Plus
Can any of the company-specific risk be diversified away by investing in both SMA Solar and Superior Plus 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 Superior Plus 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 Superior Plus Corp, you can compare the effects of market volatilities on SMA Solar and Superior Plus 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 Superior Plus. Check out your portfolio center. Please also check ongoing floating volatility patterns of SMA Solar and Superior Plus.
Diversification Opportunities for SMA Solar and Superior Plus
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SMA and Superior is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding SMA Solar Technology and Superior Plus Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Superior Plus Corp 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 Superior Plus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Superior Plus Corp has no effect on the direction of SMA Solar i.e., SMA Solar and Superior Plus go up and down completely randomly.
Pair Corralation between SMA Solar and Superior Plus
Assuming the 90 days trading horizon SMA Solar Technology is expected to generate 2.4 times more return on investment than Superior Plus. However, SMA Solar is 2.4 times more volatile than Superior Plus Corp. It trades about 0.06 of its potential returns per unit of risk. Superior Plus Corp is currently generating about 0.11 per unit of risk. If you would invest 1,440 in SMA Solar Technology on September 12, 2024 and sell it today you would earn a total of 62.00 from holding SMA Solar Technology or generate 4.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SMA Solar Technology vs. Superior Plus Corp
Performance |
| Timeline |
| SMA Solar Technology |
| Superior Plus Corp |
SMA Solar and Superior Plus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SMA Solar and Superior Plus
The main advantage of trading using opposite SMA Solar and Superior Plus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SMA Solar position performs unexpectedly, Superior Plus 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 Superior Plus will offset losses from the drop in Superior Plus' long position.| SMA Solar vs. Sunrun Inc | SMA Solar vs. SMA Solar Technology | SMA Solar vs. Superior Plus Corp | SMA Solar vs. SIVERS SEMICONDUCTORS AB |
| Superior Plus vs. AIR PRODCHEMICALS | Superior Plus vs. Suntory Beverage Food | Superior Plus vs. Molson Coors Beverage | Superior Plus vs. Monster Beverage Corp |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
Other Complementary Tools
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope |