Correlation Between Solowin Holdings and Royalty Management
Can any of the company-specific risk be diversified away by investing in both Solowin Holdings and Royalty Management 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 Solowin Holdings and Royalty Management into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Solowin Holdings Ordinary and Royalty Management Holding, you can compare the effects of market volatilities on Solowin Holdings and Royalty Management 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 Solowin Holdings with a short position of Royalty Management. Check out your portfolio center. Please also check ongoing floating volatility patterns of Solowin Holdings and Royalty Management.
Diversification Opportunities for Solowin Holdings and Royalty Management
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Solowin and Royalty is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Solowin Holdings Ordinary and Royalty Management Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Royalty Management and Solowin Holdings 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 Solowin Holdings Ordinary are associated (or correlated) with Royalty Management. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Royalty Management has no effect on the direction of Solowin Holdings i.e., Solowin Holdings and Royalty Management go up and down completely randomly.
Pair Corralation between Solowin Holdings and Royalty Management
Given the investment horizon of 90 days Solowin Holdings Ordinary is expected to generate 1.07 times more return on investment than Royalty Management. However, Solowin Holdings is 1.07 times more volatile than Royalty Management Holding. It trades about -0.06 of its potential returns per unit of risk. Royalty Management Holding is currently generating about -0.08 per unit of risk. If you would invest 239.00 in Solowin Holdings Ordinary on September 12, 2024 and sell it today you would lose (15.00) from holding Solowin Holdings Ordinary or give up 6.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Solowin Holdings Ordinary vs. Royalty Management Holding
Performance |
| Timeline |
| Solowin Holdings Ordinary |
| Royalty Management |
Solowin Holdings and Royalty Management Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Solowin Holdings and Royalty Management
The main advantage of trading using opposite Solowin Holdings and Royalty Management positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Solowin Holdings position performs unexpectedly, Royalty Management 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 Royalty Management will offset losses from the drop in Royalty Management's long position.| Solowin Holdings vs. Raymond James Financial | Solowin Holdings vs. The Charles Schwab | Solowin Holdings vs. The Charles Schwab | Solowin Holdings vs. Mercurity Fintech Holding |
| Royalty Management vs. Gladstone Investment | Royalty Management vs. Stellus Capital Investment | Royalty Management vs. Prospect Capital | Royalty Management vs. Gladstone Capital |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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