Correlation Between Scientific Industries and Solitron Devices
Can any of the company-specific risk be diversified away by investing in both Scientific Industries and Solitron Devices 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 Scientific Industries and Solitron Devices into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Scientific Industries and Solitron Devices, you can compare the effects of market volatilities on Scientific Industries and Solitron Devices 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 Scientific Industries with a short position of Solitron Devices. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scientific Industries and Solitron Devices.
Diversification Opportunities for Scientific Industries and Solitron Devices
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Scientific and Solitron is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Scientific Industries and Solitron Devices in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solitron Devices and Scientific Industries 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 Scientific Industries are associated (or correlated) with Solitron Devices. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solitron Devices has no effect on the direction of Scientific Industries i.e., Scientific Industries and Solitron Devices go up and down completely randomly.
Pair Corralation between Scientific Industries and Solitron Devices
Given the investment horizon of 90 days Scientific Industries is expected to under-perform the Solitron Devices. In addition to that, Scientific Industries is 2.73 times more volatile than Solitron Devices. It trades about -0.03 of its total potential returns per unit of risk. Solitron Devices is currently generating about -0.04 per unit of volatility. If you would invest 1,693 in Solitron Devices on August 29, 2024 and sell it today you would lose (93.00) from holding Solitron Devices or give up 5.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Scientific Industries vs. Solitron Devices
Performance |
| Timeline |
| Scientific Industries |
| Solitron Devices |
Scientific Industries and Solitron Devices Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scientific Industries and Solitron Devices
The main advantage of trading using opposite Scientific Industries and Solitron Devices positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scientific Industries position performs unexpectedly, Solitron Devices 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 Solitron Devices will offset losses from the drop in Solitron Devices' long position.| Scientific Industries vs. Rezolute | Scientific Industries vs. Tempest Therapeutics | Scientific Industries vs. Forte Biosciences | Scientific Industries vs. Dyadic International |
| Solitron Devices vs. Nova | Solitron Devices vs. inTest | Solitron Devices vs. Onto Innovation | Solitron Devices vs. Kulicke and Soffa |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data |