Correlation Between SMA Solar and Elbit Imaging
Can any of the company-specific risk be diversified away by investing in both SMA Solar and Elbit Imaging 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 Elbit Imaging 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 Elbit Imaging, you can compare the effects of market volatilities on SMA Solar and Elbit Imaging 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 Elbit Imaging. Check out your portfolio center. Please also check ongoing floating volatility patterns of SMA Solar and Elbit Imaging.
Diversification Opportunities for SMA Solar and Elbit Imaging
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between SMA and Elbit is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding SMA Solar Technology and Elbit Imaging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elbit Imaging 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 Elbit Imaging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elbit Imaging has no effect on the direction of SMA Solar i.e., SMA Solar and Elbit Imaging go up and down completely randomly.
Pair Corralation between SMA Solar and Elbit Imaging
Assuming the 90 days horizon SMA Solar Technology is expected to under-perform the Elbit Imaging. But the pink sheet apears to be less risky and, when comparing its historical volatility, SMA Solar Technology is 1.21 times less risky than Elbit Imaging. The pink sheet trades about -0.1 of its potential returns per unit of risk. The Elbit Imaging is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 53,900 in Elbit Imaging on January 26, 2024 and sell it today you would lose (18,600) from holding Elbit Imaging or give up 34.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 80.65% |
| Values | Daily Returns |
SMA Solar Technology vs. Elbit Imaging
Performance |
| Timeline |
| SMA Solar Technology |
| Elbit Imaging |
SMA Solar and Elbit Imaging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SMA Solar and Elbit Imaging
The main advantage of trading using opposite SMA Solar and Elbit Imaging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SMA Solar position performs unexpectedly, Elbit Imaging 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 Elbit Imaging will offset losses from the drop in Elbit Imaging's long position.| SMA Solar vs. Newhydrogen | SMA Solar vs. Ascent Solar Technologies | SMA Solar vs. SinglePoint | SMA Solar vs. TGI Solar Power |
| Elbit Imaging vs. Intercure | Elbit Imaging vs. Brainsway | Elbit Imaging vs. Bio View | Elbit Imaging vs. Endymed |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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