Correlation Between SMA Solar and Apollo Investment
Can any of the company-specific risk be diversified away by investing in both SMA Solar and Apollo Investment 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 SMA Solar and Apollo Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SMA Solar Technology and Apollo Investment Corp, you can compare the effects of market volatilities on SMA Solar and Apollo Investment 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 SMA Solar with a short position of Apollo Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of SMA Solar and Apollo Investment.
Diversification Opportunities for SMA Solar and Apollo Investment
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between SMA and Apollo is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding SMA Solar Technology and Apollo Investment Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apollo Investment Corp and SMA Solar 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 SMA Solar Technology are associated (or correlated) with Apollo Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apollo Investment Corp has no effect on the direction of SMA Solar i.e., SMA Solar and Apollo Investment go up and down completely randomly.
Pair Corralation between SMA Solar and Apollo Investment
Assuming the 90 days horizon SMA Solar Technology is expected to generate 4.84 times more return on investment than Apollo Investment. However, SMA Solar is 4.84 times more volatile than Apollo Investment Corp. It trades about 0.12 of its potential returns per unit of risk. Apollo Investment Corp is currently generating about -0.04 per unit of risk. If you would invest 1,345 in SMA Solar Technology on December 29, 2024 and sell it today you would earn a total of 579.00 from holding SMA Solar Technology or generate 43.05% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
SMA Solar Technology vs. Apollo Investment Corp
Performance |
Timeline |
SMA Solar Technology |
Apollo Investment Corp |
SMA Solar and Apollo Investment Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with SMA Solar and Apollo Investment
The main advantage of trading using opposite SMA Solar and Apollo Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SMA Solar position performs unexpectedly, Apollo Investment 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 Apollo Investment will offset losses from the drop in Apollo Investment's long position.SMA Solar vs. Peijia Medical Limited | SMA Solar vs. CVR Medical Corp | SMA Solar vs. Genertec Universal Medical | SMA Solar vs. X FAB Silicon Foundries |
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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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