Correlation Between SMA Solar and Stone Harbor
Can any of the company-specific risk be diversified away by investing in both SMA Solar and Stone Harbor 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 Stone Harbor 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 Stone Harbor Emerging, you can compare the effects of market volatilities on SMA Solar and Stone Harbor 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 Stone Harbor. Check out your portfolio center. Please also check ongoing floating volatility patterns of SMA Solar and Stone Harbor.
Diversification Opportunities for SMA Solar and Stone Harbor
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SMA and Stone is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding SMA Solar Technology and Stone Harbor Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stone Harbor Emerging 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 Stone Harbor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stone Harbor Emerging has no effect on the direction of SMA Solar i.e., SMA Solar and Stone Harbor go up and down completely randomly.
Pair Corralation between SMA Solar and Stone Harbor
If you would invest 508.00 in Stone Harbor Emerging on February 7, 2024 and sell it today you would earn a total of 0.00 from holding Stone Harbor Emerging or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
SMA Solar Technology vs. Stone Harbor Emerging
Performance |
| Timeline |
| SMA Solar Technology |
| Stone Harbor Emerging |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
SMA Solar and Stone Harbor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SMA Solar and Stone Harbor
The main advantage of trading using opposite SMA Solar and Stone Harbor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SMA Solar position performs unexpectedly, Stone Harbor 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 Stone Harbor will offset losses from the drop in Stone Harbor's long position.| SMA Solar vs. Sunrun Inc | SMA Solar vs. Shoals Technologies Group | SMA Solar vs. Enphase Energy | SMA Solar vs. First Solar |
| Stone Harbor vs. Qs Moderate Growth | Stone Harbor vs. Rbc Small Cap | Stone Harbor vs. Scout Small Cap | Stone Harbor vs. Touchstone Small Cap |
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 CEOs Directory module to screen CEOs from public companies around the world.
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