Correlation Between Simpson Manufacturing and Ascent Solar
Can any of the company-specific risk be diversified away by investing in both Simpson Manufacturing and Ascent Solar 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 Simpson Manufacturing and Ascent Solar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Simpson Manufacturing and Ascent Solar Technologies,, you can compare the effects of market volatilities on Simpson Manufacturing and Ascent Solar 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 Simpson Manufacturing with a short position of Ascent Solar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simpson Manufacturing and Ascent Solar.
Diversification Opportunities for Simpson Manufacturing and Ascent Solar
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Simpson and Ascent is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Simpson Manufacturing and Ascent Solar Technologies, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ascent Solar Technol and Simpson Manufacturing 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 Simpson Manufacturing are associated (or correlated) with Ascent Solar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ascent Solar Technol has no effect on the direction of Simpson Manufacturing i.e., Simpson Manufacturing and Ascent Solar go up and down completely randomly.
Pair Corralation between Simpson Manufacturing and Ascent Solar
Considering the 90-day investment horizon Simpson Manufacturing is expected to generate 0.39 times more return on investment than Ascent Solar. However, Simpson Manufacturing is 2.56 times less risky than Ascent Solar. It trades about 0.09 of its potential returns per unit of risk. Ascent Solar Technologies, is currently generating about -0.21 per unit of risk. If you would invest 17,955 in Simpson Manufacturing on September 4, 2024 and sell it today you would earn a total of 628.00 from holding Simpson Manufacturing or generate 3.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Simpson Manufacturing vs. Ascent Solar Technologies,
Performance |
| Timeline |
| Simpson Manufacturing |
| Ascent Solar Technol |
Simpson Manufacturing and Ascent Solar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Simpson Manufacturing and Ascent Solar
The main advantage of trading using opposite Simpson Manufacturing and Ascent Solar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simpson Manufacturing position performs unexpectedly, Ascent Solar 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 Ascent Solar will offset losses from the drop in Ascent Solar's long position.| Simpson Manufacturing vs. West Fraser Timber | Simpson Manufacturing vs. Interfor | Simpson Manufacturing vs. Ufp Industries | Simpson Manufacturing vs. Canfor |
| Ascent Solar vs. ServiceNow | Ascent Solar vs. Supercom | Ascent Solar vs. CDW Corp | Ascent Solar vs. FiscalNote 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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