Correlation Between SolarEdge Technologies and Maj Invest

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

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

Diversification Opportunities for SolarEdge Technologies and Maj Invest

0.08

Correlation Coefficient

SolarEdge Technologies  Maj Invest

Significant diversification

The 3 months correlation between SolarEdge and Maj is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding SolarEdge Technologies and Maj Invest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maj Invest and SolarEdge Technologies 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 SolarEdge Technologies are associated (or correlated) with Maj Invest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maj Invest has no effect on the direction of SolarEdge Technologies i.e., SolarEdge Technologies and Maj Invest go up and down completely randomly.

Pair Corralation between SolarEdge Technologies and Maj Invest

Given the investment horizon of 90 days SolarEdge Technologies is expected to under-perform the Maj Invest. In addition to that, SolarEdge Technologies is 9.99 times more volatile than Maj Invest . It trades about -0.06 of its total potential returns per unit of risk. Maj Invest is currently generating about 0.04 per unit of volatility. If you would invest  9,465  in Maj Invest on January 24, 2024 and sell it today you would earn a total of  810.00  from holding Maj Invest or generate 8.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

SolarEdge Technologies  vs.  Maj Invest

SolarEdge Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SolarEdge Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's fundamental indicators remain nearly stable which may send shares a bit higher in May 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Maj Invest

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Maj Invest has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong forward indicators, Maj Invest is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with SolarEdge Technologies and Maj Invest

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

The idea behind SolarEdge Technologies and Maj Invest 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.