Correlation Between Meyer Burger and SMA Solar
Can any of the company-specific risk be diversified away by investing in both Meyer Burger 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 Meyer Burger and SMA Solar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Meyer Burger Technology and SMA Solar Technology, you can compare the effects of market volatilities on Meyer Burger 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 Meyer Burger with a short position of SMA Solar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meyer Burger and SMA Solar.
Diversification Opportunities for Meyer Burger and SMA Solar
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Meyer and SMA is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Meyer Burger Technology 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 Meyer Burger 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 Meyer Burger Technology 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 Meyer Burger i.e., Meyer Burger and SMA Solar go up and down completely randomly.
Pair Corralation between Meyer Burger and SMA Solar
Assuming the 90 days horizon Meyer Burger Technology is expected to generate 6.12 times more return on investment than SMA Solar. However, Meyer Burger is 6.12 times more volatile than SMA Solar Technology. It trades about 0.17 of its potential returns per unit of risk. SMA Solar Technology is currently generating about 0.09 per unit of risk. If you would invest 39.00 in Meyer Burger Technology on December 4, 2024 and sell it today you would earn a total of 128.00 from holding Meyer Burger Technology or generate 328.21% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 98.33% |
Values | Daily Returns |
Meyer Burger Technology vs. SMA Solar Technology
Performance |
Timeline |
Meyer Burger Technology |
SMA Solar Technology |
Meyer Burger and SMA Solar Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Meyer Burger and SMA Solar
The main advantage of trading using opposite Meyer Burger and SMA Solar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meyer Burger 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.Meyer Burger vs. Sunlands Technology Group | Meyer Burger vs. BRP Inc | Meyer Burger vs. FDG Electric Vehicles | Meyer Burger vs. Modine Manufacturing |
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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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