Correlation Between SMA Solar and Enerkon Solar
Can any of the company-specific risk be diversified away by investing in both SMA Solar and Enerkon 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 Enerkon 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 Enerkon Solar International, you can compare the effects of market volatilities on SMA Solar and Enerkon 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 Enerkon Solar. Check out your portfolio center. Please also check ongoing floating volatility patterns of SMA Solar and Enerkon Solar.
Diversification Opportunities for SMA Solar and Enerkon Solar
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SMA and Enerkon is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding SMA Solar Technology and Enerkon Solar International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enerkon Solar Intern 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 Enerkon Solar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enerkon Solar Intern has no effect on the direction of SMA Solar i.e., SMA Solar and Enerkon Solar go up and down completely randomly.
Pair Corralation between SMA Solar and Enerkon Solar
Assuming the 90 days horizon SMA Solar Technology is expected to under-perform the Enerkon Solar. But the pink sheet apears to be less risky and, when comparing its historical volatility, SMA Solar Technology is 8.34 times less risky than Enerkon Solar. The pink sheet trades about -0.06 of its potential returns per unit of risk. The Enerkon Solar International is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 3.50 in Enerkon Solar International on August 28, 2024 and sell it today you would lose (3.48) from holding Enerkon Solar International or give up 99.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SMA Solar Technology vs. Enerkon Solar International
Performance |
| Timeline |
| SMA Solar Technology |
| Enerkon Solar Intern |
SMA Solar and Enerkon Solar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SMA Solar and Enerkon Solar
The main advantage of trading using opposite SMA Solar and Enerkon Solar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SMA Solar position performs unexpectedly, Enerkon 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 Enerkon Solar will offset losses from the drop in Enerkon Solar's long position.| SMA Solar vs. Xinyi Solar Holdings | SMA Solar vs. Xinyi Solar Holdings | SMA Solar vs. SolarEdge Technologies | SMA Solar vs. Sunrun Inc |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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