Correlation Between Neogen and Solarmax Technology

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

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

Diversification Opportunities for Neogen and Solarmax Technology

0.44

Correlation Coefficient

Neogen  Solarmax Technology

Very weak diversification

The 3 months correlation between Neogen and Solarmax is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Neogen and Solarmax Technology Common in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solarmax Technology and Neogen 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 Neogen are associated (or correlated) with Solarmax Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solarmax Technology has no effect on the direction of Neogen i.e., Neogen and Solarmax Technology go up and down completely randomly.

Pair Corralation between Neogen and Solarmax Technology

Given the investment horizon of 90 days Neogen is expected to under-perform the Solarmax Technology. But the stock apears to be less risky and, when comparing its historical volatility, Neogen is 2.79 times less risky than Solarmax Technology. The stock trades about -0.16 of its potential returns per unit of risk. The Solarmax Technology Common is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  127.00  in Solarmax Technology Common on December 20, 2024 and sell it today you would lose (13.00) from holding Solarmax Technology Common or give up 10.24% of portfolio value over 90 days.

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

Neogen  vs.  Solarmax Technology Common

Neogen

Risk-Adjusted Performance

Very Weak

Over the last 90 days Neogen has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Solarmax Technology

Risk-Adjusted Performance

Weak

Over the last 90 days Solarmax Technology Common has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Solarmax Technology is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Neogen and Solarmax Technology

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

The idea behind Neogen and Solarmax Technology Common 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.