Correlation Between Ontrak and Soluna Holdings

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

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

Diversification Opportunities for Ontrak and Soluna Holdings

0.01

Correlation Coefficient

Ontrak  Soluna Holdings

Significant diversification

The 3 months correlation between Ontrak and Soluna is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Ontrak Inc and Soluna Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Soluna Holdings and Ontrak 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 Ontrak Inc are associated (or correlated) with Soluna Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Soluna Holdings has no effect on the direction of Ontrak i.e., Ontrak and Soluna Holdings go up and down completely randomly.

Pair Corralation between Ontrak and Soluna Holdings

If you would invest  341.00  in Soluna Holdings on August 31, 2024 and sell it today you would lose (18.00) from holding Soluna Holdings or give up 5.28% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	1.59%
Values	Daily Returns

Ontrak Inc  vs.  Soluna Holdings

Ontrak Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ontrak Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable forward-looking signals, Ontrak is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Soluna Holdings

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Soluna Holdings are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, Soluna Holdings may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with Ontrak and Soluna Holdings

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

The idea behind Ontrak Inc and Soluna Holdings 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.

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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.