Correlation Between Solar Alliance and RBC Vision

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

By analyzing existing cross correlation between Solar Alliance Energy and RBC Vision Global, you can compare the effects of market volatilities on Solar Alliance and RBC Vision 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 Solar Alliance with a short position of RBC Vision. Check out your portfolio center. Please also check ongoing floating volatility patterns of Solar Alliance and RBC Vision.

Diversification Opportunities for Solar Alliance and RBC Vision

0.45

Correlation Coefficient

Solar Alliance  RBC Vision

Very weak diversification

The 3 months correlation between Solar and RBC is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Solar Alliance Energy and RBC Vision Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RBC Vision Global and Solar Alliance 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 Solar Alliance Energy are associated (or correlated) with RBC Vision. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RBC Vision Global has no effect on the direction of Solar Alliance i.e., Solar Alliance and RBC Vision go up and down completely randomly.

Pair Corralation between Solar Alliance and RBC Vision

Assuming the 90 days trading horizon Solar Alliance Energy is expected to under-perform the RBC Vision. In addition to that, Solar Alliance is 13.81 times more volatile than RBC Vision Global. It trades about -0.03 of its total potential returns per unit of risk. RBC Vision Global is currently generating about -0.06 per unit of volatility. If you would invest  2,600  in RBC Vision Global on December 22, 2024 and sell it today you would lose (88.00) from holding RBC Vision Global or give up 3.38% of portfolio value over 90 days.

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

Solar Alliance Energy  vs.  RBC Vision Global

Solar Alliance Energy

Risk-Adjusted Performance

Very Weak

Over the last 90 days Solar Alliance Energy has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's essential indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

RBC Vision Global

Risk-Adjusted Performance

Very Weak

Over the last 90 days RBC Vision Global has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong technical and fundamental indicators, RBC Vision is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Solar Alliance and RBC Vision

The main advantage of trading using opposite Solar Alliance and RBC Vision positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Solar Alliance position performs unexpectedly, RBC Vision 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 RBC Vision will offset losses from the drop in RBC Vision's long position.

The idea behind Solar Alliance Energy and RBC Vision Global 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.