Correlation Between SMA Solar and GCL Poly
Can any of the company-specific risk be diversified away by investing in both SMA Solar and GCL Poly 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 GCL Poly 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 GCL Poly Energy Holdings, you can compare the effects of market volatilities on SMA Solar and GCL Poly 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 GCL Poly. Check out your portfolio center. Please also check ongoing floating volatility patterns of SMA Solar and GCL Poly.
Diversification Opportunities for SMA Solar and GCL Poly
Very good diversification
The 3 months correlation between SMA and GCL is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding SMA Solar Technology and GCL Poly Energy Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GCL Poly Energy 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 GCL Poly. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GCL Poly Energy has no effect on the direction of SMA Solar i.e., SMA Solar and GCL Poly go up and down completely randomly.
Pair Corralation between SMA Solar and GCL Poly
Assuming the 90 days horizon SMA Solar Technology is expected to generate 0.31 times more return on investment than GCL Poly. However, SMA Solar Technology is 3.2 times less risky than GCL Poly. It trades about 0.14 of its potential returns per unit of risk. GCL Poly Energy Holdings is currently generating about -0.04 per unit of risk. If you would invest 1,446 in SMA Solar Technology on October 24, 2024 and sell it today you would earn a total of 160.00 from holding SMA Solar Technology or generate 11.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SMA Solar Technology vs. GCL Poly Energy Holdings
Performance |
| Timeline |
| SMA Solar Technology |
| GCL Poly Energy |
SMA Solar and GCL Poly Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SMA Solar and GCL Poly
The main advantage of trading using opposite SMA Solar and GCL Poly positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SMA Solar position performs unexpectedly, GCL Poly 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 GCL Poly will offset losses from the drop in GCL Poly's long position.| SMA Solar vs. Xinyi Solar Holdings | SMA Solar vs. Xinyi Solar Holdings | SMA Solar vs. Sunrun Inc | SMA Solar vs. SMA Solar Technology |
| GCL Poly vs. SMA Solar Technology | GCL Poly vs. Xinyi Solar Holdings | GCL Poly vs. SMA Solar Technology | GCL Poly vs. Three Sixty Solar |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data |