Correlation Between Solarmax Technology and 3M
Can any of the company-specific risk be diversified away by investing in both Solarmax Technology and 3M 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 Solarmax Technology and 3M into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Solarmax Technology Common and 3M Company, you can compare the effects of market volatilities on Solarmax Technology and 3M 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 Solarmax Technology with a short position of 3M. Check out your portfolio center. Please also check ongoing floating volatility patterns of Solarmax Technology and 3M.
Diversification Opportunities for Solarmax Technology and 3M
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Solarmax and 3M is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Solarmax Technology Common and 3M Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 3M Company and Solarmax Technology 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 Solarmax Technology Common are associated (or correlated) with 3M. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 3M Company has no effect on the direction of Solarmax Technology i.e., Solarmax Technology and 3M go up and down completely randomly.
Pair Corralation between Solarmax Technology and 3M
Given the investment horizon of 90 days Solarmax Technology Common is expected to generate 2.89 times more return on investment than 3M. However, Solarmax Technology is 2.89 times more volatile than 3M Company. It trades about 0.23 of its potential returns per unit of risk. 3M Company is currently generating about -0.06 per unit of risk. If you would invest 82.00 in Solarmax Technology Common on August 23, 2024 and sell it today you would earn a total of 24.00 from holding Solarmax Technology Common or generate 29.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Solarmax Technology Common vs. 3M Company
Performance |
| Timeline |
| Solarmax Technology |
| 3M Company |
Solarmax Technology and 3M Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Solarmax Technology and 3M
The main advantage of trading using opposite Solarmax Technology and 3M positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Solarmax Technology position performs unexpectedly, 3M 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 3M will offset losses from the drop in 3M's long position.| Solarmax Technology vs. Kite Realty Group | Solarmax Technology vs. SunOpta | Solarmax Technology vs. Universal Music Group | Solarmax Technology vs. Malaga Financial |
| 3M vs. Small Cap Core | 3M vs. FitLife Brands, Common | 3M vs. Mutual Of America | 3M vs. Gfl Environmental Holdings |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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