Correlation Between Stellar and Solarmax Technology

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

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

Diversification Opportunities for Stellar and Solarmax Technology

0.56

Correlation Coefficient

Stellar  Solarmax Technology

Very weak diversification

The 3 months correlation between Stellar and Solarmax is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Stellar and Solarmax Technology Common in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solarmax Technology and Stellar 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 Stellar are associated (or correlated) with Solarmax Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solarmax Technology has no effect on the direction of Stellar i.e., Stellar and Solarmax Technology go up and down completely randomly.

Pair Corralation between Stellar and Solarmax Technology

Assuming the 90 days trading horizon Stellar is expected to under-perform the Solarmax Technology. But the crypto coin apears to be less risky and, when comparing its historical volatility, Stellar is 1.13 times less risky than Solarmax Technology. The crypto coin trades about -0.05 of its potential returns per unit of risk. The Solarmax Technology Common is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  133.00  in Solarmax Technology Common on December 21, 2024 and sell it today you would lose (14.50) from holding Solarmax Technology Common or give up 10.9% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.24%
Values	Daily Returns

Stellar  vs.  Solarmax Technology Common

Stellar

Risk-Adjusted Performance

Very Weak

Over the last 90 days Stellar has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Crypto's primary indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for Stellar shareholders.

Solarmax Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days Solarmax Technology Common has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Solarmax Technology is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Stellar and Solarmax Technology

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

The idea behind Stellar and Solarmax Technology Common 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.