Correlation Between Steel Partners and Solid Power
Can any of the company-specific risk be diversified away by investing in both Steel Partners and Solid Power 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 Steel Partners and Solid Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Steel Partners Holdings and Solid Power, you can compare the effects of market volatilities on Steel Partners and Solid Power 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 Steel Partners with a short position of Solid Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Steel Partners and Solid Power.
Diversification Opportunities for Steel Partners and Solid Power
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Steel and Solid is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Steel Partners Holdings and Solid Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solid Power and Steel Partners 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 Steel Partners Holdings are associated (or correlated) with Solid Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solid Power has no effect on the direction of Steel Partners i.e., Steel Partners and Solid Power go up and down completely randomly.
Pair Corralation between Steel Partners and Solid Power
Given the investment horizon of 90 days Steel Partners is expected to generate 11.93 times less return on investment than Solid Power. But when comparing it to its historical volatility, Steel Partners Holdings is 4.62 times less risky than Solid Power. It trades about 0.02 of its potential returns per unit of risk. Solid Power is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 25.00 in Solid Power on November 18, 2024 and sell it today you would earn a total of 0.00 from holding Solid Power or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Steel Partners Holdings vs. Solid Power
Performance |
| Timeline |
| Steel Partners Holdings |
| Solid Power |
Steel Partners and Solid Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Steel Partners and Solid Power
The main advantage of trading using opposite Steel Partners and Solid Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Steel Partners position performs unexpectedly, Solid Power 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 Solid Power will offset losses from the drop in Solid Power's long position.| Steel Partners vs. Compass Diversified | Steel Partners vs. Compass Diversified | Steel Partners vs. Compass Diversified | Steel Partners vs. Tejon Ranch Co |
| Solid Power vs. Solid Power | Solid Power vs. EVgo Equity Warrants | Solid Power vs. Microvast Holdings | Solid Power vs. IONQ WT |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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