Correlation Between Cizzle Biotechnology and SMA Solar

Can any of the company-specific risk be diversified away by investing in both Cizzle Biotechnology 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 Cizzle Biotechnology and SMA Solar into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cizzle Biotechnology Holdings and SMA Solar Technology, you can compare the effects of market volatilities on Cizzle Biotechnology 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 Cizzle Biotechnology with a short position of SMA Solar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cizzle Biotechnology and SMA Solar.

Diversification Opportunities for Cizzle Biotechnology and SMA Solar

0.5

Correlation Coefficient

Cizzle Biotechnology  SMA Solar

Very weak diversification

The 3 months correlation between Cizzle and SMA is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Cizzle Biotechnology Holdings 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 Cizzle Biotechnology 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 Cizzle Biotechnology Holdings 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 Cizzle Biotechnology i.e., Cizzle Biotechnology and SMA Solar go up and down completely randomly.

Pair Corralation between Cizzle Biotechnology and SMA Solar

Assuming the 90 days trading horizon Cizzle Biotechnology Holdings is expected to generate 2.39 times more return on investment than SMA Solar. However, Cizzle Biotechnology is 2.39 times more volatile than SMA Solar Technology. It trades about 0.15 of its potential returns per unit of risk. SMA Solar Technology is currently generating about 0.08 per unit of risk. If you would invest  155.00  in Cizzle Biotechnology Holdings on October 25, 2024 and sell it today you would earn a total of  30.00  from holding Cizzle Biotechnology Holdings or generate 19.35% return on investment over 90 days.

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

Cizzle Biotechnology Holdings  vs.  SMA Solar Technology

Cizzle Biotechnology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cizzle Biotechnology Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Cizzle Biotechnology is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

SMA Solar Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SMA Solar Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Cizzle Biotechnology and SMA Solar

The main advantage of trading using opposite Cizzle Biotechnology and SMA Solar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cizzle Biotechnology 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.

The idea behind Cizzle Biotechnology Holdings and SMA Solar Technology 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.