Correlation Between Solitron Devices and Table Trac
Can any of the company-specific risk be diversified away by investing in both Solitron Devices and Table Trac 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 Table Trac into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Solitron Devices and Table Trac, you can compare the effects of market volatilities on Solitron Devices and Table Trac 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 Table Trac. Check out your portfolio center. Please also check ongoing floating volatility patterns of Solitron Devices and Table Trac.
Diversification Opportunities for Solitron Devices and Table Trac
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Solitron and Table is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Solitron Devices and Table Trac in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Table Trac 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 Table Trac. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Table Trac has no effect on the direction of Solitron Devices i.e., Solitron Devices and Table Trac go up and down completely randomly.
Pair Corralation between Solitron Devices and Table Trac
Given the investment horizon of 90 days Solitron Devices is expected to generate 1.13 times more return on investment than Table Trac. However, Solitron Devices is 1.13 times more volatile than Table Trac. It trades about 0.03 of its potential returns per unit of risk. Table Trac is currently generating about 0.02 per unit of risk. If you would invest 1,550 in Solitron Devices on August 30, 2024 and sell it today you would earn a total of 12.00 from holding Solitron Devices or generate 0.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Solitron Devices vs. Table Trac
Performance |
| Timeline |
| Solitron Devices |
| Table Trac |
Solitron Devices and Table Trac Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Solitron Devices and Table Trac
The main advantage of trading using opposite Solitron Devices and Table Trac positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Solitron Devices position performs unexpectedly, Table Trac 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 Table Trac will offset losses from the drop in Table Trac's long position.| Solitron Devices vs. Nova | Solitron Devices vs. inTest | Solitron Devices vs. Onto Innovation | Solitron Devices vs. Kulicke and Soffa |
| Table Trac vs. Las Vegas Sands | Table Trac vs. MGM Resorts International | Table Trac vs. Caesars Entertainment | Table Trac vs. Wynn Resorts Limited |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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