Correlation Between Aluminumof China and SolarEdge Technologies
Can any of the company-specific risk be diversified away by investing in both Aluminumof China and SolarEdge Technologies 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 Aluminumof China and SolarEdge Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aluminum of and SolarEdge Technologies, you can compare the effects of market volatilities on Aluminumof China and SolarEdge Technologies 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 Aluminumof China with a short position of SolarEdge Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aluminumof China and SolarEdge Technologies.
Diversification Opportunities for Aluminumof China and SolarEdge Technologies
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Aluminumof and SolarEdge is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Aluminum of and SolarEdge Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SolarEdge Technologies and Aluminumof China 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 Aluminum of are associated (or correlated) with SolarEdge Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SolarEdge Technologies has no effect on the direction of Aluminumof China i.e., Aluminumof China and SolarEdge Technologies go up and down completely randomly.
Pair Corralation between Aluminumof China and SolarEdge Technologies
Assuming the 90 days horizon Aluminumof China is expected to generate 11.91 times less return on investment than SolarEdge Technologies. But when comparing it to its historical volatility, Aluminum of is 2.68 times less risky than SolarEdge Technologies. It trades about 0.01 of its potential returns per unit of risk. SolarEdge Technologies is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,180 in SolarEdge Technologies on December 5, 2024 and sell it today you would earn a total of 140.00 from holding SolarEdge Technologies or generate 11.86% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 98.33% |
Values | Daily Returns |
Aluminum of vs. SolarEdge Technologies
Performance |
Timeline |
Aluminumof China |
SolarEdge Technologies |
Aluminumof China and SolarEdge Technologies Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Aluminumof China and SolarEdge Technologies
The main advantage of trading using opposite Aluminumof China and SolarEdge Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aluminumof China position performs unexpectedly, SolarEdge Technologies 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 SolarEdge Technologies will offset losses from the drop in SolarEdge Technologies' long position.Aluminumof China vs. MidCap Financial Investment | Aluminumof China vs. Verizon Communications | Aluminumof China vs. Spirent Communications plc | Aluminumof China vs. Scottish Mortgage Investment |
SolarEdge Technologies vs. Ares Management Corp | SolarEdge Technologies vs. CONTAGIOUS GAMING INC | SolarEdge Technologies vs. Waste Management | SolarEdge Technologies vs. GAMING FAC SA |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
Other Complementary Tools
Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |