Correlation Between Smart Powerr and Heliogen

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

By analyzing existing cross correlation between Smart Powerr Corp and Heliogen, you can compare the effects of market volatilities on Smart Powerr and Heliogen 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 Smart Powerr with a short position of Heliogen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Smart Powerr and Heliogen.

Diversification Opportunities for Smart Powerr and Heliogen

0.07

Correlation Coefficient

Smart Powerr  Heliogen

Significant diversification

The 3 months correlation between Smart and Heliogen is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Smart Powerr Corp and Heliogen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heliogen and Smart Powerr 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 Smart Powerr Corp are associated (or correlated) with Heliogen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heliogen has no effect on the direction of Smart Powerr i.e., Smart Powerr and Heliogen go up and down completely randomly.

Pair Corralation between Smart Powerr and Heliogen

Given the investment horizon of 90 days Smart Powerr Corp is expected to generate 0.67 times more return on investment than Heliogen. However, Smart Powerr Corp is 1.5 times less risky than Heliogen. It trades about -0.02 of its potential returns per unit of risk. Heliogen is currently generating about -0.05 per unit of risk. If you would invest  195.00  in Smart Powerr Corp on October 21, 2024 and sell it today you would lose (132.00) from holding Smart Powerr Corp or give up 67.69% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	24.6%
Values	Daily Returns

Smart Powerr Corp  vs.  Heliogen

Smart Powerr Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Smart Powerr Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest abnormal performance, the Stock's technical and fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Heliogen

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Heliogen has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, Heliogen is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Smart Powerr and Heliogen

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

The idea behind Smart Powerr Corp and Heliogen 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.