Correlation Between SMA Solar and Xinyi Solar
Can any of the company-specific risk be diversified away by investing in both SMA Solar and Xinyi Solar 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 Xinyi Solar 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 Xinyi Solar Holdings, you can compare the effects of market volatilities on SMA Solar and Xinyi Solar 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 Xinyi Solar. Check out your portfolio center. Please also check ongoing floating volatility patterns of SMA Solar and Xinyi Solar.
Diversification Opportunities for SMA Solar and Xinyi Solar
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between SMA and Xinyi is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding SMA Solar Technology and Xinyi Solar Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xinyi Solar Holdings 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 Xinyi Solar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xinyi Solar Holdings has no effect on the direction of SMA Solar i.e., SMA Solar and Xinyi Solar go up and down completely randomly.
Pair Corralation between SMA Solar and Xinyi Solar
Assuming the 90 days horizon SMA Solar is expected to generate 2.13 times less return on investment than Xinyi Solar. But when comparing it to its historical volatility, SMA Solar Technology is 1.15 times less risky than Xinyi Solar. It trades about 0.01 of its potential returns per unit of risk. Xinyi Solar Holdings is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 39.00 in Xinyi Solar Holdings on November 3, 2024 and sell it today you would earn a total of 0.00 from holding Xinyi Solar Holdings or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
SMA Solar Technology vs. Xinyi Solar Holdings
Performance |
| Timeline |
| SMA Solar Technology |
| Xinyi Solar Holdings |
SMA Solar and Xinyi Solar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SMA Solar and Xinyi Solar
The main advantage of trading using opposite SMA Solar and Xinyi Solar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SMA Solar position performs unexpectedly, Xinyi Solar 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 Xinyi Solar will offset losses from the drop in Xinyi Solar'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 |
| Xinyi Solar vs. SMA Solar Technology | Xinyi Solar vs. SMA Solar Technology | Xinyi Solar vs. GCL Poly Energy Holdings | Xinyi Solar 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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