Correlation Between Solarmax Technology and Steel Partners
Can any of the company-specific risk be diversified away by investing in both Solarmax Technology and Steel Partners 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 Steel Partners 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 Steel Partners Holdings, you can compare the effects of market volatilities on Solarmax Technology and Steel Partners 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 Steel Partners. Check out your portfolio center. Please also check ongoing floating volatility patterns of Solarmax Technology and Steel Partners.
Diversification Opportunities for Solarmax Technology and Steel Partners
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Solarmax and Steel is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Solarmax Technology Common and Steel Partners Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Steel Partners Holdings 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 Steel Partners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Steel Partners Holdings has no effect on the direction of Solarmax Technology i.e., Solarmax Technology and Steel Partners go up and down completely randomly.
Pair Corralation between Solarmax Technology and Steel Partners
Given the investment horizon of 90 days Solarmax Technology Common is expected to generate 1.22 times more return on investment than Steel Partners. However, Solarmax Technology is 1.22 times more volatile than Steel Partners Holdings. It trades about 0.13 of its potential returns per unit of risk. Steel Partners Holdings is currently generating about 0.02 per unit of risk. If you would invest 94.00 in Solarmax Technology Common on August 24, 2024 and sell it today you would earn a total of 12.00 from holding Solarmax Technology Common or generate 12.77% 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. Steel Partners Holdings
Performance |
| Timeline |
| Solarmax Technology |
| Steel Partners Holdings |
Solarmax Technology and Steel Partners Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Solarmax Technology and Steel Partners
The main advantage of trading using opposite Solarmax Technology and Steel Partners positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Solarmax Technology position performs unexpectedly, Steel Partners 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 Steel Partners will offset losses from the drop in Steel Partners' long position.| Solarmax Technology vs. Rivian Automotive | Solarmax Technology vs. Weibo Corp | Solarmax Technology vs. Iridium Communications | Solarmax Technology vs. Visteon Corp |
| Steel Partners vs. Compass Diversified | Steel Partners vs. Compass Diversified | Steel Partners vs. Compass Diversified | Steel Partners vs. Tejon Ranch Co |
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 Valuation module to check real value of public entities based on technical and fundamental data.
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