Correlation Between Vastned Retail and SMA Solar
Can any of the company-specific risk be diversified away by investing in both Vastned Retail and SMA 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 Vastned Retail and SMA Solar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vastned Retail NV and SMA Solar Technology, you can compare the effects of market volatilities on Vastned Retail and SMA 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 Vastned Retail with a short position of SMA Solar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vastned Retail and SMA Solar.
Diversification Opportunities for Vastned Retail and SMA Solar
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Vastned and SMA is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Vastned Retail NV and SMA Solar Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SMA Solar Technology and Vastned Retail 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 Vastned Retail NV are associated (or correlated) with SMA Solar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SMA Solar Technology has no effect on the direction of Vastned Retail i.e., Vastned Retail and SMA Solar go up and down completely randomly.
Pair Corralation between Vastned Retail and SMA Solar
Assuming the 90 days horizon Vastned Retail NV is expected to under-perform the SMA Solar. But the stock apears to be less risky and, when comparing its historical volatility, Vastned Retail NV is 4.05 times less risky than SMA Solar. The stock trades about -0.25 of its potential returns per unit of risk. The SMA Solar Technology is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 1,225 in SMA Solar Technology on September 20, 2024 and sell it today you would earn a total of 157.00 from holding SMA Solar Technology or generate 12.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vastned Retail NV vs. SMA Solar Technology
Performance |
| Timeline |
| Vastned Retail NV |
| SMA Solar Technology |
Vastned Retail and SMA Solar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vastned Retail and SMA Solar
The main advantage of trading using opposite Vastned Retail and SMA Solar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vastned Retail position performs unexpectedly, SMA 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 SMA Solar will offset losses from the drop in SMA Solar's long position.| Vastned Retail vs. Tower One Wireless | Vastned Retail vs. NURAN WIRELESS INC | Vastned Retail vs. RCM TECHNOLOGIES | Vastned Retail vs. RYU Apparel |
| SMA Solar vs. DFS Furniture PLC | SMA Solar vs. Corporate Office Properties | SMA Solar vs. Caseys General Stores | SMA Solar vs. Vastned Retail NV |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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