Correlation Between SMA Solar and SolarWorld Aktiengesellscha
Can any of the company-specific risk be diversified away by investing in both SMA Solar and SolarWorld Aktiengesellscha 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 SolarWorld Aktiengesellscha 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 SolarWorld Aktiengesellschaft, you can compare the effects of market volatilities on SMA Solar and SolarWorld Aktiengesellscha 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 SolarWorld Aktiengesellscha. Check out your portfolio center. Please also check ongoing floating volatility patterns of SMA Solar and SolarWorld Aktiengesellscha.
Diversification Opportunities for SMA Solar and SolarWorld Aktiengesellscha
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between SMA and SolarWorld is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding SMA Solar Technology and SolarWorld Aktiengesellschaft in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SolarWorld Aktiengesellscha 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 SolarWorld Aktiengesellscha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SolarWorld Aktiengesellscha has no effect on the direction of SMA Solar i.e., SMA Solar and SolarWorld Aktiengesellscha go up and down completely randomly.
Pair Corralation between SMA Solar and SolarWorld Aktiengesellscha
If you would invest 1,514 in SMA Solar Technology on November 3, 2024 and sell it today you would lose (14.00) from holding SMA Solar Technology or give up 0.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
SMA Solar Technology vs. SolarWorld Aktiengesellschaft
Performance |
| Timeline |
| SMA Solar Technology |
| SolarWorld Aktiengesellscha |
SMA Solar and SolarWorld Aktiengesellscha Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SMA Solar and SolarWorld Aktiengesellscha
The main advantage of trading using opposite SMA Solar and SolarWorld Aktiengesellscha positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SMA Solar position performs unexpectedly, SolarWorld Aktiengesellscha 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 SolarWorld Aktiengesellscha will offset losses from the drop in SolarWorld Aktiengesellscha's long position.| SMA Solar vs. ClearVue Technologies Limited | SMA Solar vs. Xinyi Solar Holdings | SMA Solar vs. Meyer Burger Technology | SMA Solar vs. Go Solar USA |
| SolarWorld Aktiengesellscha vs. HUTCHMED DRC | SolarWorld Aktiengesellscha vs. Cardinal Health | SolarWorld Aktiengesellscha vs. PennantPark Floating Rate | SolarWorld Aktiengesellscha vs. SLR Investment Corp |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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