Correlation Between SAIHEAT and Soluna Holdings

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

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

Diversification Opportunities for SAIHEAT and Soluna Holdings

0.29

Correlation Coefficient

SAIHEAT  Soluna Holdings

Modest diversification

The 3 months correlation between SAIHEAT and Soluna is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding SAIHEAT Limited and Soluna Holdings Preferred in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Soluna Holdings Preferred and SAIHEAT 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 SAIHEAT Limited 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 Preferred has no effect on the direction of SAIHEAT i.e., SAIHEAT and Soluna Holdings go up and down completely randomly.

Pair Corralation between SAIHEAT and Soluna Holdings

Assuming the 90 days horizon SAIHEAT Limited is expected to generate 4.74 times more return on investment than Soluna Holdings. However, SAIHEAT is 4.74 times more volatile than Soluna Holdings Preferred. It trades about 0.1 of its potential returns per unit of risk. Soluna Holdings Preferred is currently generating about -0.07 per unit of risk. If you would invest  9.82  in SAIHEAT Limited on December 30, 2024 and sell it today you would lose (0.40) from holding SAIHEAT Limited or give up 4.07% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	45.16%
Values	Daily Returns

SAIHEAT Limited  vs.  Soluna Holdings Preferred

SAIHEAT Limited

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SAIHEAT Limited are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent technical indicators, SAIHEAT showed solid returns over the last few months and may actually be approaching a breakup point.

Soluna Holdings Preferred

Risk-Adjusted Performance

Very Weak

Over the last 90 days Soluna Holdings Preferred has generated negative risk-adjusted returns adding no value to investors with long positions. Even with inconsistent performance in the last few months, the Preferred Stock's technical indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with SAIHEAT and Soluna Holdings

The main advantage of trading using opposite SAIHEAT and Soluna Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SAIHEAT 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 SAIHEAT Limited and Soluna Holdings Preferred 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.