Correlation Between SMA Solar and Country Garden
Can any of the company-specific risk be diversified away by investing in both SMA Solar and Country Garden 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 SMA Solar and Country Garden into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SMA Solar Technology and Country Garden Holdings, you can compare the effects of market volatilities on SMA Solar and Country Garden 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 SMA Solar with a short position of Country Garden. Check out your portfolio center. Please also check ongoing floating volatility patterns of SMA Solar and Country Garden.
Diversification Opportunities for SMA Solar and Country Garden
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SMA and Country is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding SMA Solar Technology and Country Garden Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Country Garden Holdings and SMA Solar 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 SMA Solar Technology are associated (or correlated) with Country Garden. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Country Garden Holdings has no effect on the direction of SMA Solar i.e., SMA Solar and Country Garden go up and down completely randomly.
Pair Corralation between SMA Solar and Country Garden
Assuming the 90 days horizon SMA Solar Technology is expected to under-perform the Country Garden. But the pink sheet apears to be less risky and, when comparing its historical volatility, SMA Solar Technology is 6.99 times less risky than Country Garden. The pink sheet trades about -0.07 of its potential returns per unit of risk. The Country Garden Holdings is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 10.00 in Country Garden Holdings on January 24, 2024 and sell it today you would earn a total of 0.00 from holding Country Garden Holdings or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SMA Solar Technology vs. Country Garden Holdings
Performance |
| Timeline |
| SMA Solar Technology |
| Country Garden Holdings |
SMA Solar and Country Garden Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SMA Solar and Country Garden
The main advantage of trading using opposite SMA Solar and Country Garden positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SMA Solar position performs unexpectedly, Country Garden 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 Country Garden will offset losses from the drop in Country Garden's long position.| SMA Solar vs. VivoPower International PLC | SMA Solar vs. Ascent Solar Technologies | SMA Solar vs. iSun Inc | SMA Solar vs. Canadian Solar |
| Country Garden vs. Where Food Comes | Country Garden vs. Kura Sushi USA | Country Garden vs. LuxUrban Hotels 1300 | Country Garden vs. BJs Restaurants |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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