Correlation Between Spectrum Brands and Solidion Technology
Can any of the company-specific risk be diversified away by investing in both Spectrum Brands and Solidion Technology 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 Spectrum Brands and Solidion Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Spectrum Brands Holdings and Solidion Technology, you can compare the effects of market volatilities on Spectrum Brands and Solidion Technology 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 Spectrum Brands with a short position of Solidion Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spectrum Brands and Solidion Technology.
Diversification Opportunities for Spectrum Brands and Solidion Technology
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Spectrum and Solidion is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Spectrum Brands Holdings and Solidion Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solidion Technology and Spectrum Brands 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 Spectrum Brands Holdings are associated (or correlated) with Solidion Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solidion Technology has no effect on the direction of Spectrum Brands i.e., Spectrum Brands and Solidion Technology go up and down completely randomly.
Pair Corralation between Spectrum Brands and Solidion Technology
Considering the 90-day investment horizon Spectrum Brands is expected to generate 10.74 times less return on investment than Solidion Technology. But when comparing it to its historical volatility, Spectrum Brands Holdings is 7.01 times less risky than Solidion Technology. It trades about 0.06 of its potential returns per unit of risk. Solidion Technology is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 37.00 in Solidion Technology on September 4, 2024 and sell it today you would earn a total of 4.00 from holding Solidion Technology or generate 10.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Spectrum Brands Holdings vs. Solidion Technology
Performance |
| Timeline |
| Spectrum Brands Holdings |
| Solidion Technology |
Spectrum Brands and Solidion Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Spectrum Brands and Solidion Technology
The main advantage of trading using opposite Spectrum Brands and Solidion Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spectrum Brands position performs unexpectedly, Solidion Technology 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 Solidion Technology will offset losses from the drop in Solidion Technology's long position.| Spectrum Brands vs. European Wax Center | Spectrum Brands vs. Inter Parfums | Spectrum Brands vs. Mannatech Incorporated | Spectrum Brands vs. Nu Skin Enterprises |
| Solidion Technology vs. Skechers USA | Solidion Technology vs. Acme United | Solidion Technology vs. World Houseware Limited | Solidion Technology vs. Spectrum Brands Holdings |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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