Correlation Between Solar Alliance and CCL Industries
Can any of the company-specific risk be diversified away by investing in both Solar Alliance and CCL Industries 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 Solar Alliance and CCL Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Solar Alliance Energy and CCL Industries, you can compare the effects of market volatilities on Solar Alliance and CCL Industries 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 Solar Alliance with a short position of CCL Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Solar Alliance and CCL Industries.
Diversification Opportunities for Solar Alliance and CCL Industries
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Solar and CCL is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Solar Alliance Energy and CCL Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CCL Industries and Solar Alliance 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 Solar Alliance Energy are associated (or correlated) with CCL Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CCL Industries has no effect on the direction of Solar Alliance i.e., Solar Alliance and CCL Industries go up and down completely randomly.
Pair Corralation between Solar Alliance and CCL Industries
Assuming the 90 days trading horizon Solar Alliance Energy is expected to under-perform the CCL Industries. In addition to that, Solar Alliance is 10.45 times more volatile than CCL Industries. It trades about -0.01 of its total potential returns per unit of risk. CCL Industries is currently generating about 0.02 per unit of volatility. If you would invest 7,681 in CCL Industries on August 23, 2024 and sell it today you would earn a total of 61.00 from holding CCL Industries or generate 0.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Solar Alliance Energy vs. CCL Industries
Performance |
| Timeline |
| Solar Alliance Energy |
| CCL Industries |
Solar Alliance and CCL Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Solar Alliance and CCL Industries
The main advantage of trading using opposite Solar Alliance and CCL Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Solar Alliance position performs unexpectedly, CCL Industries 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 CCL Industries will offset losses from the drop in CCL Industries' long position.| Solar Alliance vs. Nickel Creek Platinum | Solar Alliance vs. Converge Technology Solutions | Solar Alliance vs. Canlan Ice Sports | Solar Alliance vs. Forsys Metals Corp |
| CCL Industries vs. Fairfax Financial Holdings | CCL Industries vs. US Financial 15 | CCL Industries vs. Aurora Solar Technologies | CCL Industries vs. Solar Alliance Energy |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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