Correlation Between SMA Solar and SMA Solar

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both SMA Solar 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 SMA Solar and SMA Solar 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 SMA Solar Technology, you can compare the effects of market volatilities on SMA Solar 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 SMA Solar with a short position of SMA Solar. Check out your portfolio center. Please also check ongoing floating volatility patterns of SMA Solar and SMA Solar.

Diversification Opportunities for SMA Solar and SMA Solar

0.96
  Correlation Coefficient

Almost no diversification

The 3 months correlation between SMA and SMA is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding SMA Solar 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 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 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 SMA Solar i.e., SMA Solar and SMA Solar go up and down completely randomly.

Pair Corralation between SMA Solar and SMA Solar

Assuming the 90 days horizon SMA Solar Technology is expected to generate 1.0 times more return on investment than SMA Solar. However, SMA Solar is 1.0 times more volatile than SMA Solar Technology. It trades about -0.05 of its potential returns per unit of risk. SMA Solar Technology is currently generating about -0.06 per unit of risk. If you would invest  1,787  in SMA Solar Technology on September 14, 2024 and sell it today you would lose (285.00) from holding SMA Solar Technology or give up 15.95% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

SMA Solar Technology  vs.  SMA Solar Technology

 Performance 
       Timeline  
SMA Solar Technology 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days SMA Solar Technology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.
SMA Solar Technology 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days SMA Solar Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

SMA Solar and SMA Solar Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with SMA Solar and SMA Solar

The main advantage of trading using opposite SMA Solar and SMA Solar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SMA Solar 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.
The idea behind SMA Solar Technology and SMA Solar Technology 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 Anywhere module to track or share privately all of your investments from the convenience of any device.

Other Complementary Tools

Companies Directory
Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals
Financial Widgets
Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets
Portfolio Holdings
Check your current holdings and cash postion to detemine if your portfolio needs rebalancing
Performance Analysis
Check effects of mean-variance optimization against your current asset allocation
My Watchlist Analysis
Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like