Correlation Between Solar Alliance and Nickel Creek
Can any of the company-specific risk be diversified away by investing in both Solar Alliance and Nickel Creek 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 Nickel Creek 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 Nickel Creek Platinum, you can compare the effects of market volatilities on Solar Alliance and Nickel Creek 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 Nickel Creek. Check out your portfolio center. Please also check ongoing floating volatility patterns of Solar Alliance and Nickel Creek.
Diversification Opportunities for Solar Alliance and Nickel Creek
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Solar and Nickel is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Solar Alliance Energy and Nickel Creek Platinum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nickel Creek Platinum 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 Nickel Creek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nickel Creek Platinum has no effect on the direction of Solar Alliance i.e., Solar Alliance and Nickel Creek go up and down completely randomly.
Pair Corralation between Solar Alliance and Nickel Creek
Assuming the 90 days trading horizon Solar Alliance Energy is expected to generate 7.17 times more return on investment than Nickel Creek. However, Solar Alliance is 7.17 times more volatile than Nickel Creek Platinum. It trades about 0.06 of its potential returns per unit of risk. Nickel Creek Platinum is currently generating about 0.07 per unit of risk. If you would invest 4.00 in Solar Alliance Energy on August 27, 2024 and sell it today you would earn a total of 0.00 from holding Solar Alliance Energy or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Solar Alliance Energy vs. Nickel Creek Platinum
Performance |
| Timeline |
| Solar Alliance Energy |
| Nickel Creek Platinum |
Solar Alliance and Nickel Creek Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Solar Alliance and Nickel Creek
The main advantage of trading using opposite Solar Alliance and Nickel Creek positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Solar Alliance position performs unexpectedly, Nickel Creek 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 Nickel Creek will offset losses from the drop in Nickel Creek's long position.| Solar Alliance vs. Braille Energy Systems | Solar Alliance vs. Therma Bright | Solar Alliance vs. CryptoStar Corp | Solar Alliance vs. Manganese X 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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