Correlation Between Alternet Systems and Soluna Holdings

Can any of the company-specific risk be diversified away by investing in both Alternet Systems and Soluna Holdings 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 Alternet Systems and Soluna Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Alternet Systems and Soluna Holdings Preferred, you can compare the effects of market volatilities on Alternet Systems and Soluna Holdings 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 Alternet Systems with a short position of Soluna Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alternet Systems and Soluna Holdings.

Diversification Opportunities for Alternet Systems and Soluna Holdings

0.6

Correlation Coefficient

Alternet Systems  Soluna Holdings

Poor diversification

The 3 months correlation between Alternet and Soluna is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Alternet Systems and Soluna Holdings Preferred in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Soluna Holdings Preferred and Alternet Systems 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 Alternet Systems are associated (or correlated) with Soluna Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Soluna Holdings Preferred has no effect on the direction of Alternet Systems i.e., Alternet Systems and Soluna Holdings go up and down completely randomly.

Pair Corralation between Alternet Systems and Soluna Holdings

Given the investment horizon of 90 days Alternet Systems is expected to generate 1.74 times more return on investment than Soluna Holdings. However, Alternet Systems is 1.74 times more volatile than Soluna Holdings Preferred. It trades about 0.0 of its potential returns per unit of risk. Soluna Holdings Preferred is currently generating about -0.1 per unit of risk. If you would invest  0.10  in Alternet Systems on December 21, 2024 and sell it today you would lose (0.02) from holding Alternet Systems or give up 20.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Alternet Systems  vs.  Soluna Holdings Preferred

Alternet Systems

Risk-Adjusted Performance

Very Weak

Over the last 90 days Alternet Systems has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Alternet Systems is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Soluna Holdings Preferred

Risk-Adjusted Performance

Very Weak

Over the last 90 days Soluna Holdings Preferred has generated negative risk-adjusted returns adding no value to investors with long positions. Even with inconsistent performance in the last few months, the Preferred Stock's technical indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Alternet Systems and Soluna Holdings

The main advantage of trading using opposite Alternet Systems and Soluna Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alternet Systems position performs unexpectedly, Soluna Holdings 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 Soluna Holdings will offset losses from the drop in Soluna Holdings' long position.

The idea behind Alternet Systems and Soluna Holdings Preferred pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.