Correlation Between Sigma Labs and Soluna Holdings

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

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

Diversification Opportunities for Sigma Labs and Soluna Holdings

-0.04

Correlation Coefficient

Sigma Labs  Soluna Holdings

Good diversification

The 3 months correlation between Sigma and Soluna is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Sigma Labs and Soluna Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Soluna Holdings and Sigma Labs 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 Sigma Labs 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 Sigma Labs i.e., Sigma Labs and Soluna Holdings go up and down completely randomly.

Pair Corralation between Sigma Labs and Soluna Holdings

If you would invest  21.00  in Sigma Labs on September 29, 2024 and sell it today you would earn a total of  0.00  from holding Sigma Labs or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	0.79%
Values	Daily Returns

Sigma Labs  vs.  Soluna Holdings

Sigma Labs

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sigma Labs has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Sigma Labs is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Soluna Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Soluna Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Sigma Labs and Soluna Holdings

The main advantage of trading using opposite Sigma Labs and Soluna Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sigma Labs 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 Sigma Labs 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.

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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.