Correlation Between Solitron Devices and SCI Engineered
Can any of the company-specific risk be diversified away by investing in both Solitron Devices and SCI Engineered 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 Solitron Devices and SCI Engineered into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Solitron Devices and SCI Engineered Materials, you can compare the effects of market volatilities on Solitron Devices and SCI Engineered 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 Solitron Devices with a short position of SCI Engineered. Check out your portfolio center. Please also check ongoing floating volatility patterns of Solitron Devices and SCI Engineered.
Diversification Opportunities for Solitron Devices and SCI Engineered
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Solitron and SCI is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Solitron Devices and SCI Engineered Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCI Engineered Materials and Solitron Devices 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 Solitron Devices are associated (or correlated) with SCI Engineered. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCI Engineered Materials has no effect on the direction of Solitron Devices i.e., Solitron Devices and SCI Engineered go up and down completely randomly.
Pair Corralation between Solitron Devices and SCI Engineered
Given the investment horizon of 90 days Solitron Devices is expected to generate 0.69 times more return on investment than SCI Engineered. However, Solitron Devices is 1.44 times less risky than SCI Engineered. It trades about 0.15 of its potential returns per unit of risk. SCI Engineered Materials is currently generating about 0.05 per unit of risk. If you would invest 1,600 in Solitron Devices on October 21, 2024 and sell it today you would earn a total of 90.00 from holding Solitron Devices or generate 5.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Solitron Devices vs. SCI Engineered Materials
Performance |
| Timeline |
| Solitron Devices |
| SCI Engineered Materials |
Solitron Devices and SCI Engineered Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Solitron Devices and SCI Engineered
The main advantage of trading using opposite Solitron Devices and SCI Engineered positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Solitron Devices position performs unexpectedly, SCI Engineered 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 SCI Engineered will offset losses from the drop in SCI Engineered's long position.| Solitron Devices vs. NRx Pharmaceuticals | Solitron Devices vs. RenovaCare | Solitron Devices vs. Aerovate Therapeutics | Solitron Devices vs. Akari Therapeutics PLC |
| SCI Engineered vs. Surge Components | SCI Engineered vs. Solitron Devices | SCI Engineered vs. Table Trac | SCI Engineered vs. Ieh 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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