Correlation Between Solaris Energy and Now
Can any of the company-specific risk be diversified away by investing in both Solaris Energy and Now 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 Solaris Energy and Now into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Solaris Energy Infrastructure, and Now Inc, you can compare the effects of market volatilities on Solaris Energy and Now 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 Solaris Energy with a short position of Now. Check out your portfolio center. Please also check ongoing floating volatility patterns of Solaris Energy and Now.
Diversification Opportunities for Solaris Energy and Now
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Solaris and Now is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Solaris Energy Infrastructure, and Now Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Now Inc and Solaris Energy 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 Solaris Energy Infrastructure, are associated (or correlated) with Now. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Now Inc has no effect on the direction of Solaris Energy i.e., Solaris Energy and Now go up and down completely randomly.
Pair Corralation between Solaris Energy and Now
Considering the 90-day investment horizon Solaris Energy Infrastructure, is expected to generate 1.95 times more return on investment than Now. However, Solaris Energy is 1.95 times more volatile than Now Inc. It trades about 0.21 of its potential returns per unit of risk. Now Inc is currently generating about 0.05 per unit of risk. If you would invest 839.00 in Solaris Energy Infrastructure, on September 2, 2024 and sell it today you would earn a total of 1,626 from holding Solaris Energy Infrastructure, or generate 193.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Solaris Energy Infrastructure, vs. Now Inc
Performance |
| Timeline |
| Solaris Energy Infra |
| Now Inc |
Solaris Energy and Now Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Solaris Energy and Now
The main advantage of trading using opposite Solaris Energy and Now positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Solaris Energy position performs unexpectedly, Now 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 Now will offset losses from the drop in Now's long position.| Solaris Energy vs. Brunswick | Solaris Energy vs. U Power Limited | Solaris Energy vs. Organic Sales and | Solaris Energy vs. Marine Products |
| Now vs. Oil States International | Now vs. Oceaneering International | Now vs. Geospace Technologies | Now vs. Newpark Resources |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
Other Complementary Tools
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA |