Correlation Between Soluna Holdings and Fortress Biotech
Can any of the company-specific risk be diversified away by investing in both Soluna Holdings and Fortress Biotech 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 Soluna Holdings and Fortress Biotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Soluna Holdings Preferred and Fortress Biotech Pref, you can compare the effects of market volatilities on Soluna Holdings and Fortress Biotech 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 Soluna Holdings with a short position of Fortress Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Soluna Holdings and Fortress Biotech.
Diversification Opportunities for Soluna Holdings and Fortress Biotech
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Soluna and Fortress is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Soluna Holdings Preferred and Fortress Biotech Pref in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fortress Biotech Pref and Soluna Holdings 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 Soluna Holdings Preferred are associated (or correlated) with Fortress Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fortress Biotech Pref has no effect on the direction of Soluna Holdings i.e., Soluna Holdings and Fortress Biotech go up and down completely randomly.
Pair Corralation between Soluna Holdings and Fortress Biotech
Assuming the 90 days horizon Soluna Holdings Preferred is expected to generate 2.52 times more return on investment than Fortress Biotech. However, Soluna Holdings is 2.52 times more volatile than Fortress Biotech Pref. It trades about -0.04 of its potential returns per unit of risk. Fortress Biotech Pref is currently generating about -0.26 per unit of risk. If you would invest 1,210 in Soluna Holdings Preferred on August 31, 2024 and sell it today you would lose (99.00) from holding Soluna Holdings Preferred or give up 8.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Soluna Holdings Preferred vs. Fortress Biotech Pref
Performance |
| Timeline |
| Soluna Holdings Preferred |
| Fortress Biotech Pref |
Soluna Holdings and Fortress Biotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Soluna Holdings and Fortress Biotech
The main advantage of trading using opposite Soluna Holdings and Fortress Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Soluna Holdings position performs unexpectedly, Fortress Biotech 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 Fortress Biotech will offset losses from the drop in Fortress Biotech's long position.The idea behind Soluna Holdings Preferred and Fortress Biotech Pref pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Fortress Biotech vs. Absci Corp | Fortress Biotech vs. Larimar Therapeutics | Fortress Biotech vs. InMed Pharmaceuticals | Fortress Biotech vs. Kronos Bio |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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