Correlation Between SMA SOLAR and SMA Solar
Can any of the company-specific risk be diversified away by investing in both SMA SOLAR and SMA Solar 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 SMA Solar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SMA SOLAR T and SMA Solar Technology, you can compare the effects of market volatilities on SMA SOLAR and SMA Solar 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 SMA Solar. Check out your portfolio center. Please also check ongoing floating volatility patterns of SMA SOLAR and SMA Solar.
Diversification Opportunities for SMA SOLAR and SMA Solar
Almost no diversification
The 3 months correlation between SMA and SMA is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding SMA SOLAR T and SMA Solar Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SMA Solar Technology 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 T are associated (or correlated) with SMA Solar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SMA Solar Technology has no effect on the direction of SMA SOLAR i.e., SMA SOLAR and SMA Solar go up and down completely randomly.
Pair Corralation between SMA SOLAR and SMA Solar
Assuming the 90 days horizon SMA SOLAR T is expected to generate 1.37 times more return on investment than SMA Solar. However, SMA SOLAR is 1.37 times more volatile than SMA Solar Technology. It trades about -0.14 of its potential returns per unit of risk. SMA Solar Technology is currently generating about -0.2 per unit of risk. If you would invest 448.00 in SMA SOLAR T on September 1, 2024 and sell it today you would lose (332.00) from holding SMA SOLAR T or give up 74.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SMA SOLAR T vs. SMA Solar Technology
Performance |
| Timeline |
| SMA SOLAR T |
| SMA Solar Technology |
SMA SOLAR and SMA Solar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SMA SOLAR and SMA Solar
The main advantage of trading using opposite SMA SOLAR and SMA Solar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SMA SOLAR position performs unexpectedly, SMA Solar 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 SMA Solar will offset losses from the drop in SMA Solar's long position.| SMA SOLAR vs. Xinyi Solar Holdings | SMA SOLAR vs. Superior Plus Corp | SMA SOLAR vs. NMI Holdings | SMA SOLAR vs. Origin Agritech |
| SMA Solar vs. PSI Software AG | SMA Solar vs. Alfa Financial Software | SMA Solar vs. Major Drilling Group | SMA Solar vs. ATOSS SOFTWARE |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |