Correlation Between Soluna Holdings and High-yield Municipal

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

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

Diversification Opportunities for Soluna Holdings and High-yield Municipal

-0.39

Correlation Coefficient

Soluna Holdings  High-yield Municipal

Very good diversification

The 3 months correlation between Soluna and HIGH-YIELD is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Soluna Holdings and High Yield Municipal Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on High Yield Municipal and Soluna Holdings 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 Soluna Holdings are associated (or correlated) with High-yield Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of High Yield Municipal has no effect on the direction of Soluna Holdings i.e., Soluna Holdings and High-yield Municipal go up and down completely randomly.

Pair Corralation between Soluna Holdings and High-yield Municipal

Given the investment horizon of 90 days Soluna Holdings is expected to under-perform the High-yield Municipal. In addition to that, Soluna Holdings is 29.91 times more volatile than High Yield Municipal Fund. It trades about -0.15 of its total potential returns per unit of risk. High Yield Municipal Fund is currently generating about 0.05 per unit of volatility. If you would invest  875.00  in High Yield Municipal Fund on December 20, 2024 and sell it today you would earn a total of  6.00  from holding High Yield Municipal Fund or generate 0.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Soluna Holdings  vs.  High Yield Municipal Fund

Soluna Holdings

Risk-Adjusted Performance

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 April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

High Yield Municipal

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in High Yield Municipal Fund are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, High-yield Municipal is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Soluna Holdings and High-yield Municipal

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

The idea behind Soluna Holdings and High Yield Municipal Fund 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.